Some investors who once saw crypto as the defining trade of the era are now reallocating into artificial intelligence.
Daniel Koss, who had built a large Bitcoin position and believed cryptocurrencies would reshape finance, changed course after the AI boom gathered pace. The 30-year-old investor said fast-moving advances in AI had the potential to disrupt multiple industries, prompting him to act. In August last year, he sold a six-figure Bitcoin holding and moved that capital fully into AI-related investments.
Based in Zug, Switzerland, Koss said, 「That felt like early humans discovering fire.」
Capital rotation from crypto into AI stocks
Koss’s portfolio shift reflects a wider move described in the report: over the past year, retail investors and hedge funds have sold Bitcoin and other tokens while chasing AI stocks.
The report links that rotation to Bitcoin’s price struggles. After hitting a record above $126,000 in October last year, Bitcoin came under sustained pressure and spent a long period hovering near $60,000. At the time, tariff threats by the Trump administration against China sparked selling across risk assets.
Chipmakers and other AI-linked stocks, meanwhile, posted the kind of explosive gains once more commonly associated with crypto markets. Mike McGlone, senior commodity strategist at Bloomberg Intelligence, said, 「The crypto market is going through a deep washout, and this is only the beginning.」
While major US stock indexes kept setting new highs this year, Bitcoin continued to weaken. Koss said he has no short-term plan to trade Bitcoin again. In his view, crypto assets have matured, and the period of exponential upside is over. He does not expect Bitcoin to post a 10x return within a single year again.
Given Bitcoin’s size, he said, even a doubling would count as an exceptionally high return.
Ryan Ho says institutional money kept moving toward AI
Even committed crypto backers have been trimming positions and rotating into AI names with stronger swings. Ryan Ho, founder of social trading platform Legend, said he held a seven-figure Bitcoin position when the token was near $120,000 and at that point believed Bitcoin would 「never fall below $100,000 again.」
That did not happen. In December last year, Ho said he swapped a large portion of his Bitcoin and altcoin holdings into AI-related stocks, including chip companies such as Intel. He still holds several hundred thousand dollars’ worth of Bitcoin.
The 25-year-old entrepreneur said the main reason for cutting crypto exposure was what he saw as a structural weakening in the market. After the sharp drop in October, he said, crypto no longer behaved like a healthy risk-asset market: buying demand had dried up, while institutional money kept flowing into AI.
He also said crypto later decoupled from US equities. Stocks kept climbing, while crypto prices stalled. In his view, retail investors can more easily buy into the AI growth story because the sector already has real-world use cases, including ChatGPT and AI-assisted coding.
Another factor behind the shift, he said, was access. Platforms such as Hyperliquid began listing AI stock derivatives, giving crypto-native traders a direct way to trade those names.
Ho said, 「Over the past few months, a large number of crypto traders started trading AI stocks, and the main reason is that the trading channels opened up.」
Some investors are simply cashing out
Not all of the money leaving crypto has gone into AI. The report says some traders have chosen to lock in gains after the earlier rally in Bitcoin and major tokens.
Trader and digital artist Minh Le recently sold part of his crypto holdings to buy a Ferrari. He also directed a large share of his profits into Japanese anime collectibles, including One Piece and Pokémon cards.
Le, who lives in Los Angeles, built wealth through NFTs and meme coins. He entered the market in 2017, using a credit card to buy Litecoin when it was popular. During the pandemic, he increased his investments with government relief checks.
Not long after buying the meme coin issued by Trump, Le made a large exit. The token had launched shortly before Trump’s inauguration. 「That was the fastest money I ever made, and I knew it was time to get out,」 he said.
After watching from the sidelines for several months, Le has entered crypto again, but with a more conservative approach. He is now focusing only on assets with real-world use cases, such as stablecoins used for payments.
Le said, 「If digital paper gains cannot be turned into real money to improve life and create better experiences, what is the point of making money?」