So recently, big players from Wall Street have spoken about interesting conditions in the market this year. They said the easy phase of the rally driven by AI seems to be over, and now we are entering a more selective phase.

Rick Rieder from BlackRock, Ulrike Hoffmann-Burchardi from UBS, and Daniel Loeb from Third Point—all agree that capital is starting to shift from mega-cap tech stocks to other sectors like industry, electrification, and healthcare. This means investors are getting tired of the same main theme repeatedly. They are now more focused on where growth and disruption might emerge.

Now, this is important for us in crypto. Bitcoin (BTC) is currently trading at $74.30K, but its position will change in this more fragmented landscape. In the past, Bitcoin often served as a proxy for tech trades—high beta, high risk. But if investors start diversifying out of stocks, Bitcoin could become attractive from a different perspective.

What’s interesting is that Bitcoin previously wasn’t very consistent as a hedge against dollar weakness. A few months ago, gold was the favorite when investors moved out of the dollar. But as Bitcoin continues to evolve, the situation might change. Bitcoin has a simpler value proposition compared to complex bets driven by AI and software—that could be an advantage.

According to Rieder, the productivity from AI could help the economy grow while a weak labor market keeps inflation in check. The combination of stronger growth plus lower interest rates is usually bullish for risk assets like crypto. But if inflation remains controlled and real economic improvements happen, investors might feel less urgent to seek alternative stores of value.

In that scenario, the case for Bitcoin relies more on portfolio diversification and institutional adoption rather than macro fears. Hoffmann-Burchardi from UBS also highlights that AI trades are undergoing significant changes. After three years of the market rewarding companies supporting AI development, investors are now entering a phase where winners and losers will be more sharply separated.

UBS has downgraded its overweight position in the tech sector and shifted to industrial, electrification, and healthcare. This rotation also affects crypto. Tokens tied to the broad AI narrative might face more scrutiny. Bitcoin is in a better position than smaller crypto assets because its investment case is more straightforward—no need to prove software revenue models or win the AI race.

Loeb from Third Point says the market has rewarded investors who do deeper stock picking and more short selling. He describes a shift from mega-cap trading toward smaller, specialized companies, including those in Europe, Japan, and Korea that supply key components for AI infrastructure.

Overall, these three investors depict a year where growth remains strong, AI stays a dominant force, but the market becomes more challenging to navigate. For Bitcoin, this probably means less push from simple momentum trading and a greater need to stand alone as a hedge, diversification, or liquid alternative in a fragmented market.

Meanwhile, XRP is rallying with strong trading volume and whale accumulation, but it’s still in a broader downtrend and has not confirmed a sustained bullish reversal. The integration of XRP by Rakuten into their payment app, used by 44 million users, could be significant, but the market remains in a wait-and-see attitude.