Bitcoin and Ethereum have fallen behind equities, precious metals, and parts of the commodities complex even as global risk assets keep climbing. In a July 29 post, Garrett Jin argued that the weakness does not show a breakdown in crypto fundamentals. His view is that the pressure comes mainly from internal market structure and cycle dynamics.
He pointed to three structural factors. First, the deleveraging phase that began last October has not fully run its course. Retail traders using high leverage were forced out during the drawdown, pulling speculative capital from the market and leaving sentiment defensive. Second, crypto market microstructure remains heavily retail-driven, with professional institutional participation still relatively limited, making prices more sensitive to emotion and short-term narratives. Third, some exchanges, market makers, or speculative funds may be profiting by amplifying downside moves and triggering cascades of liquidations.
AI stocks and precious metals are pulling retail money away
Jin also said recent FOMO in AI-related equities and precious metals has become a magnet for capital, especially money from Asian and US retail traders. That matters because these investors are still the core user base of the crypto market. Once funds move out, they do not quickly return.
In his view, capital does not shift easily between crypto and traditional finance. Regulatory friction, trading processes, and investor behavior all slow the path back, which means outflows from digital assets can linger in other markets for a while instead of rotating straight back into BTC and ETH.
Short-term weakness looks different on a longer time scale
Jin pushed back on judging Bitcoin and Ethereum by recent performance alone. He said that on a three-year view, both assets have trailed parts of the broader market. But on a six-year basis measured from the global market bottom in March 2020, BTC and ETH have still outperformed most asset classes, with ETH ranking among the strongest performers.
That is why he sees the current phase as a mean reversion move inside a larger uptrend rather than evidence that the market’s core narratives have failed. Price underperformance, in his framing, is not the same thing as a broken thesis.
He compares the current setup to China A-shares in 2015
Jin drew a comparison with the adjustment phase in China’s A-share market in 2015: leverage inflated the bubble, the peak was followed by repeated deleveraging, volatility gradually cooled, and only after that did a new bull phase emerge.
He believes BTC and ETH may now be nearing the end of that deleveraging process. The signs he cited include the futures contango structure, discounts in digital asset-related stocks, and the possibility of a better macro backdrop through rate-cut expectations, clearer regulation, and the end of quantitative tightening, or QT.
Ethereum’s longer-term case still ties to AI and RWA
On Ethereum, Jin used both technical and fundamental arguments. Technically, he compared ETH’s recent pattern with Tesla in 2024: an inverse head-and-shoulders formation, a top, a sharp drop, then an extended period of sideways consolidation before a breakout. On fundamentals, he said Ethereum remains core infrastructure for AI applications and RWA, or real-world asset tokenization. As long as those two growth narratives remain in place, he believes ETH’s long-term upside case remains open.
He also rejected the idea that BTC and ETH are merely risk assets and therefore bound to lag other markets. In his telling, both assets combine high volatility with some safe-haven characteristics, especially during periods of geopolitical stress. The heavier source of pressure is still inside the crypto market itself: late-stage deleveraging sensitivity, a retail-dominated structure, passive positioning through ETFs and related equities, and concentrated selling and liquidation activity during Asian and US sleep hours.
Jin’s closing view was straightforward: if Bitcoin still holds its role as digital gold and Ethereum still holds its role as core infrastructure for AI and RWA, there is no clear reason for either asset to stay behind other markets over the long run.