Summary

• Crypto-related stocks are outperforming both Bitcoin and broader equity markets YTD, a divergence driven by AI infrastructure pivots, stablecoin adoption and the ongoing equity bull market.
• Recent 13F filings show major asset managers are also reducing direct crypto exposure (BTC, ETH, XRP, SOL) while rotating into selected crypto infrastructure names.
• Of all crypto market narratives, I think only two are valid: Bitcoin as a global reserve asset and stablecoins as a cross-border payments rail. We are in a narrative crisis.
• A third market narrative, that of crypto existing for the sake of actively trading it, is a zero-sum game corresponding with my long term bear case scenario for the industry.
• I rate Bitcoin a BUY as the only cryptocurrency with a compelling long-term investment case, while ETH is also moderately interesting. I see no BUY-worthy opportunities in the rest of the crypto space.

While looking at the crypto market lately, one can notice a somewhat odd trend. Bitcoin (BTC-USD) is underperforming the S&P 500 (SP500) Year-to-Date, with a -14%. At the same time however, many crypto-related names are actually outperforming not only Bitcoin but

Analyst’s Disclosure: I/we have a beneficial long position in the shares of BTC-USD, IBIT, ETH-USD either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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