After AI-led gains pushed equities higher while Bitcoin underperformed, market participants expect macroeconomic policy and shifting market structure to become the dominant forces ahead.
The first half of the year was largely defined by the AI trade. The second half may instead revolve around a more difficult question: which companies and assets are actually positioned to benefit from it.
The divergence between crypto and equities has emerged as one of the key market themes of the year. AI enthusiasm drove technology stocks to record highs, while Bitcoin (BTC) has dropped about 46%, trading near $58,300 on Tuesday.
Analysts say investors are now entering a phase where AI trends, monetary policy, and evolving market mechanics could drive sharp swings across both equities and cryptocurrencies, even as the broader economy remains relatively resilient.
Former Credit Suisse global head of portfolio strategy and Kestrel CIO Mark Connors said AI is no longer lifting the entire tech sector uniformly. Instead, it is creating a split between firms building AI infrastructure and those at risk of disruption from large language models and AI agents.
He said “the market is being split in two,” pointing to recent pressure on firms like Accenture as evidence that investors are reassessing consulting companies as AI automates more knowledge-based tasks. He also highlighted weakness in software names such as Autodesk and Intuit, suggesting continued strain on traditional software businesses.
At the same time, he expects macro uncertainty to remain the key driver across financial markets. Rising correlations between stocks, bonds, commodities, and crypto suggest investors are increasingly reacting to policy shifts rather than company-specific fundamentals.
He warned that “the rest of the year is going to be messy,” citing uncertainty around Federal Reserve policy and U.S. Treasury financing as factors likely to sustain volatility before conditions eventually improve.
Hyperion Decimus co-founder and portfolio manager Chris Sullivan echoed the view of heightened uncertainty but said investors are focusing too much on narratives and not enough on underlying market structure.
He argued that the launch of U.S. spot Bitcoin ETFs, along with institutional hedging in derivatives markets, has altered Bitcoin’s trading behavior and weakened its traditional macro correlations.
Bitcoin’s recent downturn has also revived debate over whether its four-year cycle has been disrupted. While some expected ETF inflows to reduce volatility and smooth out boom-and-bust patterns, Sullivan disagrees, saying the current decline still fits within historical cycle dynamics.
He said he is waiting for a clearer bottom formation before declaring the bear market over, noting that sentiment is approaching levels where “it’s so bearish it’s bullish” from a risk-reward perspective.
Sullivan expects Bitcoin to find a bottom in the $54,000 to $58,000 range, pointing to improving on-chain fundamentals and deeply negative sentiment as potential signals for a longer-term opportunity once current uncertainty passes.
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