Wintermute: Cryptocurrency Market Lacks AI-like Growth Narrative, Struggling to Attract New Capital

June 2 Update: Wintermute’s latest market analysis highlights that the cryptocurrency sector has recently significantly underperformed the U.S. stock market. Bitcoin dropped below $70,000, while the S&P 500 notched its ninth consecutive week of gains. Bitcoin spot ETFs saw approximately $1.4 billion in outflows — the longest continuous outflow stretch since their launch — and Ethereum ETFs posted roughly $240 million in outflows. Market risk sentiment is clearly shifting toward the traditional U.S. stock market. On the macro front, U.S. core PCE for April rose to 3.3% year-over-year, pointing to persistent inflationary pressures. Even as Brent crude prices plummeted around 20% to roughly $91 during the month, the U.S. 10-year Treasury yield fell to 4.45%. Still, markets are pricing in a 35% to 40% probability of an interest rate hike later this year. In contrast, AI-driven software and technology stocks have continued to deliver strong results, pushing the Nasdaq to an ~8% monthly gain, with fresh capital flowing into U.S. equities. The analysis notes that the crypto market currently lacks a growth narrative comparable to AI, making it tough to attract new inflows. Beyond Bitcoin and Ethereum, the standout in crypto is the Hyperliquid ecosystem’s token, HYPE, which crossed $70 and continues to climb — marking one of the few assets decoupled from the broader market’s decline. While the crypto sector faces short-term pressure, long-term funds have started gradually entering the market. Looking ahead, ETF fund flows and U.S. inflation data will remain critical factors shaping market trends.