K33 Research Predicts Choppy Summer for Bitcoin Amid AI Stock Surge
Bitcoin set for 'choppy summer' as capital chases high-flying AI stocks, K33 says
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Bitcoin is expected to face a challenging summer as investors shift their focus to AI stocks, leading to significant outflows from Bitcoin ETFs. K33 Research highlights fading institutional demand and rising leverage as factors contributing to potential deeper losses for Bitcoin, which it still views as undervalued relative to equities.
- 01K33 Research reports that Bitcoin ETFs have experienced their second-largest outflow streak, shedding 62,794 BTC in three weeks.
- 02The firm's head, Vetle Lunde, notes that fading institutional demand and heavy ETF outflows are contributing to Bitcoin's current weakness.
- 03Despite the challenges, K33 still considers Bitcoin undervalued compared to equities in the long term.
- 04The report indicates that CME Bitcoin futures open interest has dropped to its lowest level since October 2023, signaling reduced institutional exposure.
- 05Investors are increasingly drawn to upcoming tech IPOs, such as those from SpaceX and Anthropic, further diverting capital away from cryptocurrency.
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K33 Research forecasts a difficult summer for Bitcoin as capital flows shift towards high-performing AI stocks and upcoming tech IPOs. Vetle Lunde, head of K33, pointed out that Bitcoin is facing significant challenges, including the second-largest outflow streak from Bitcoin ETFs, which saw a loss of 62,794 BTC over three weeks. The report highlights a decline in institutional demand and a weakening derivatives market, with CME Bitcoin futures open interest at its lowest since October 2023. Although K33 previously viewed Bitcoin's drop to around $60,000 as the cycle low, the firm now expresses caution, suggesting that rising leverage and diminished demand could lead to further losses. Despite these challenges, K33 maintains that Bitcoin remains undervalued relative to equities over the long term. Lunde emphasizes that with capital reluctant to enter the market and existing holders trimming their exposure, a choppy summer is anticipated for Bitcoin.
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The shift in investment capital away from Bitcoin could lead to reduced market stability and price volatility, affecting existing Bitcoin holders and potential investors.
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