According to Jim Ferraioli from Charles Schwab, the recent dip in Bitcoin's performance is more indicative of a shift towards other momentum investments like AI and IPOs, rather than stemming from Michael Saylor's bitcoin transactions.
By Helene Braun|Edited by Stephen Alpher Jun 3, 2026, 6:48 p.m. 4 min readMake preferred on (Michael M. Santiago/Getty Images)Key Insights:
- According to Jim Ferraioli of Charles Schwab, Bitcoin's recent struggles are less about waning institutional interest or Michael Saylor's bitcoin sales, and more about its loss of the position as the market's leading momentum asset.
- Funds that previously sought speculative gains in cryptocurrency are now migrating towards other trending sectors, including gold, AI stocks, and IPOs, often utilizing crypto platforms that have started offering non-crypto trading options.
- Despite an increase in institutional involvement, regulatory advancements, and broader ETF availability, Bitcoin continues to be viewed as a retail-driven, momentum asset, with seasonal fluctuations and investor tendencies to cash out at breakeven contributing to its challenges in attracting new purchases.
Bitcoin's BTC$65,933.97 recent inability to keep pace with U.S. stock performance has led to various interpretations, ranging from worries over Michael Saylor's (MSTR) bitcoin sales to speculations about a decline in institutional demand.
Jim Ferraioli from Charles Schwab offers a clearer perspective: Bitcoin is losing its momentum appeal.
"Bitcoin has been in a bear market since October," Ferraioli stated in an interview. "It’s not just that; it’s quite straightforward."
This view contrasts with a more optimistic market narrative that has highlighted positive trends. Over the past year, the crypto sector has achieved spot ETF approvals, attracted substantial institutional funding, and moved towards clearer regulations in Washington. Nevertheless, Bitcoin has struggled to maintain the explosive growth many had anticipated.
Instead, investment capital has been redirected elsewhere.
"We identified a bottom in early February, and since then, another major Wall Street firm launched a successful ETF, leading to a renewed focus on institutional adoption narratives," Ferraioli explained.
This rebound allowed Bitcoin to recover from its lows in February. However, unlike past crypto cycles, the recovery has not evolved into a widespread speculative surge.
Ferraioli argues that crypto investors are not motivated by fundamentals, but rather by momentum. He believes Bitcoin's challenge isn't a lack of positive news, but rather the competition it faces.
Historically, crypto has thrived when it has been seen as the most attractive speculative opportunity. When prices increase, traders flock to it. But when another asset class captures interest, capital often shifts in that direction.
"Crypto investors have historically followed the momentum wherever it leads," Ferraioli remarked. "Currently, that momentum is not within crypto."
The targets for investment have shifted over the last year.
Some investors are turning to precious metals, with gold seeing significant inflows as a hedge against both stock market volatility and crypto uncertainty. Others are increasingly focused on artificial intelligence, which has emerged as the leading growth narrative in financial markets.
The AI surge has introduced new speculative avenues that were not available in previous crypto cycles. Companies involved in AI infrastructure, data centers, and advanced computing have delivered impressive returns, while anticipated IPOs from firms like OpenAI and Anthropic have become key focus points for investors seeking the next big opportunity.
Ferraioli believes crypto investors are also participating in this trend.
"I believe those who are drawn to momentum are now excited about IPOs," he stated. "Some of these can be accessed as private shares through decentralized exchanges like Hyperliquid."
This trend is noteworthy as it underscores how crypto trading platforms are increasingly enabling speculation on assets beyond just cryptocurrencies.
Platforms such as Hyperliquid (HYPE) have begun offering perpetual contracts linked to private companies, commodities, and other non-crypto assets, providing traders with new avenues for investment.
For Bitcoin, this means it is now competing not just with other cryptocurrencies, but with every major speculative trend in the market.
Ferraioli also downplayed worries regarding Saylor's recent sale of 32 bitcoins, which stirred investor debate due to his strong reputation as a bitcoin proponent.
"The prevailing narrative was that they would never sell," Ferraioli noted. However, he feels the actual market impact of this sale has been exaggerated. “But I don’t believe [the sale] is the real driving factor,” he added.
Instead, he sees it as a convenient narrative tied to a broader trend already in motion.
This trend may also relate to investor cost bases, as many ETF investors are still recovering from sharp price fluctuations over the past year and view current prices as a chance to exit rather than invest further.
"When prices reach certain levels, people say, 'I’ve recouped my investment, maybe I’ll consider it later,'" Ferraioli explained.
This dynamic has led to a market atmosphere that feels markedly different from the exuberant phases of past cycles.
Ferraioli contends that while institutional adoption is genuine, it remains less widespread than many market observers believe. Although bitcoin ETFs have broadened access to cryptocurrency, the market is still largely driven by retail investors and those pursuing momentum trades.
"This is primarily a retail asset," he reiterated.
This distinction is crucial, as retail investors often behave differently than traditional institutional investors. Rather than basing their decisions on discounted cash flow or long-term valuation models, they tend to follow trends.
This behavior helps explain why Bitcoin has struggled to take advantage of recent regulatory advancements.
The crypto sector is awaiting the potential passage of the Clarity Act, a bill many in the industry believe could offer a clearer regulatory framework for digital assets in the U.S. In the long run, Ferraioli believes such measures could bolster adoption.
However, in the short term, regulation alone may not suffice to alter the current trajectory.
"There is still a greater demand for downside protection," he mentioned in Schwab's market outlook, though this pressure has shown some signs of easing in recent weeks.
Seasonal factors may also be playing a role in the slowdown. Historically, summer has been one of Bitcoin's weaker seasons, as trading activity diminishes and investors redirect their focus elsewhere.
"People are aware that summer is traditionally the weakest time for Bitcoin," Ferraioli stated.
This leaves the market in a challenging position.
While institutional adoption is on the rise, regulatory advancements are progressing, and significant financial institutions continue to develop crypto-related products, none of these developments guarantee price increases if investor focus shifts elsewhere.
"There’s a lack of incentive to buy at this moment when other options are available," Ferraioli concluded.
Currently, he argues that Bitcoin's most pressing issue is not Saylor, regulation, or macroeconomic factors, but rather that investors have found new pursuits to follow.
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