2026 Cryptocurrency Market Structural Deceleration: AI Capital Drain, IPO Liquidity Shock, and Bitcoin Underperforming the Nasdaq Fund Rotation

On the same day that the U.S. stock indices S&P 500 and the Nasdaq both set new all-time closing records, Bitcoin stayed range-bound in the $75,000–$76,000 band. Meanwhile, Micron Technology surged by more than 17% in a single day, breaking through a trillion-dollar market capitalization for the first time. A sharp drop in oil prices—driven by expectations that geopolitical tensions would ease—did not push capital back into crypto assets as traditional logic would predict; instead, capital is flowing into the AI infrastructure segment with unprecedented force. Behind this structural mismatch is a rotation of capital in the crypto market that has been underestimated.

A Covered-Up Market Divergence: Oil Plunge, Micron Spurt, Bitcoin Sideways

On May 25, 2026, a report by an Arab TV channel said that a draft agreement between the U.S. and Iran had been reached, causing international oil prices to fall sharply. The front-month Brent crude futures contract dropped more than 8% intraday to $94.11 per barrel, while the front-month WTI crude futures fell more than 5% to $90.32 per barrel—both registering their largest single-day declines since May 6. Meanwhile, the 10-year U.S. Treasury yield fell by about 7 basis points, and gold declined as the U.S. dollar strengthened—according to traditional asset allocation logic, this would appear to be a favorable environment for risk assets, especially crypto.

However, the facts show a completely different picture. According to Gate market data, as of May 27, 2026, Bitcoin was trading at $75,804.9, down 1.30% over the past 24 hours. Over the past 7 days it was only up 1.96%, up 11.76% over the past 30 days, and down 22.08% over the past year. Since falling steadily from a recent high near $82,500 on May 6, Bitcoin has been forming a “lower high” structure on its technical chart.

At the same time, the U.S. AI chip sector put on what can only be described as a frenzy of a one-way rally. The Nasdaq rose 1.19% on the day, and the S&P 500 index climbed 0.61%; both set new all-time intraday and closing highs. The Philadelphia Semiconductor Index jumped 5.53%, with a year-to-date gain already reaching 81.8%. Most notably, Micron Technology: its stock price extended its daily gain to 17%, and at one point surged as high as 19.3%. Its market cap broke through $1 trillion for the first time. Over the past 12 months, Micron’s stock has multiplied eightfold.

This divergence goes beyond what typical asset rotation can explain. On the same day, the unwinding of the geopolitical risk premium alongside the oil price plunge did not trigger the risk-asset premium narrative that the crypto market would have been expected to receive. The market’s “multiple-choice question” is being answered in an unprecedented way.

Timeline Recap: Geopolitical Risk Release and Structural Divergence

To recap this market divergence, we need to trace back to the starting point of this U.S.-Iran conflict. On February 28, 2026, the U.S.-Iran conflict officially broke out. Since then, oil prices have experienced four key drop points, occurring on April 7, April 17, May 6, and May 25. In each round, the underlying logic was the market’s expectation that U.S.-Iran negotiations would achieve substantive progress and that the shipping conditions in the Strait of Hormuz would improve—leading to the reversal of the geopolitical risk premium.

The most worth noting is May 25. The draft includes terms such as free access to the Strait of Hormuz and clearing mines, restoring navigation within 30 days, and the U.S. easing port blockade measures. But at the same time, Iran’s Islamic Revolutionary Guard Corps said that over the past 24 hours, 25 ships transited the strait under coordination by the Revolutionary Guard, while the U.S. side’s negotiation stance remained firm. Geopolitical risk has not been eliminated; it has instead entered a more predictable phase of “negotiation game.”

For the crypto market, the problem is that even as the geopolitical risk premium unwinds, Bitcoin has not formed effective capital reflow. From May 25 to 26, Brent crude futures recovered part of their losses during the day and returned above $100, but Bitcoin still met the situation with a sideways posture.

Another background indicator that cannot be ignored is the flow of funds into U.S. Bitcoin spot ETFs. According to statistics, Bitcoin spot ETFs saw net outflows of more than $2.26 billion cumulatively over two weeks, as institutional capital systematically rotated out of crypto assets back into stocks and commodities. This outflow occurred right after the CLARITY Act passed the Senate Banking Committee with a 15 to 9 vote, at a point when regulatory certainty improved significantly. The supportive effect of regulation on Bitcoin prices shows a clear lag under the current macro liquidity pressure.

A Structural Turning Point in Capital Flows: When “Allocating to AI” Becomes Institutional Consensus

Capital shifting from crypto to AI is not an isolated phenomenon; a series of structural allocation changes are happening in parallel.

In mid-May, Wedbush Securities analyst Dan Ives pointed out clearly that Bitcoin is losing allocation from investors because institutions face a “dollar-for-dollar” choice between two options. When investors have cash that needs to be deployed, they view AI stocks as a more attractive choice. Ives described this as a “once-in-a-century” allocation cycle—AI stocks not only provide diversified exposure to categories such as chip manufacturers (including Nvidia) and cloud computing companies, but their infrastructure spending and commercialization revenues are being realized in tandem, with a growth logic that can be verified.

Pantera Capital CEO Dan Morehead’s quantitative analysis offers another perspective. Internal data shows that trading prices for leading AI companies are about 33% above their four-year logarithmic trend line, while Bitcoin is about 43% below its historical trend line. Morehead calls this gap “the largest divergence in history.” Pantera’s long-term view is that crypto markets are relatively cheap and have upside potential, but the objective reality is that in the short term, the balance of institutional allocations is still tilting toward AI.

From a more macro view of the pool of capital, the scale of AI capital expenditures is creating a “crowding-out effect” on the crypto market. Some analysts point out that in the next five years, AI capital expenditures will reach $7.6 trillion; the demand for capital allocation at this magnitude has been continuously siphoning liquidity from the Bitcoin and altcoin markets.

The IPO Window for OpenAI and SpaceX: A Trillion-Dollar “Siphon”

The current crypto market faces not only the continued strength of the AI track, but also a liquidity “siphon” effect stemming from the largest IPOs in history.

OpenAI is accelerating its plans to go public. In March 2026, OpenAI completed a $122 billion private placement, with a post-investment valuation of $852 billion—setting a record for the largest single funding round in Silicon Valley history. Market reports say OpenAI is targeting a public listing in September 2026, with a target valuation exceeding $1 trillion and expected fundraising of about $60 billion. That would surpass Saudi Aramco’s 2019 IPO record of $25.6 billion by a wide margin.

SpaceX’s IPO is even closer. The company has officially filed an S-1 registration statement with the U.S. SEC, with the stock ticker SPCX, and is expected to price on June 12. The target valuation is $1.75 trillion to $2 trillion, with a fundraising size of about $75 billion; if it goes smoothly, it would become the largest IPO globally in history.

SpaceX’s financial situation itself also illustrates the extreme nature of AI infrastructure investment. In full-year 2025, its combined revenue was $18.674 billion, but operating losses were $2.589 billion. In the first quarter of 2026, capital expenditures reached $10.107 billion, of which the AI segment accounted for $7.723 billion. In just this year’s first quarter alone, SpaceX lost $4.3 billion. Yet these losses have not prevented the market from assigning it a $2 trillion valuation—investors are not buying based on current profitability, but on extremely optimistic expectations for the future space economy and AI compute infrastructure.

For the crypto market, why the listings of SpaceX and OpenAI pose a threat is not only that they “pull liquidity” out of the broader market at trillion-dollar scale, but also that they provide traditional investors with a tech asset allocation channel that offers greater narrative certainty than crypto assets. JPMorgan previously calculated that if SpaceX were to list at a $2 trillion valuation and ultimately 50% of the shares became tradable, passive funds would have to sell about $95 billion worth of existing tech stock holdings to complete index weight adjustments. This scale of rebalancing implies liquidity shocks that cannot be ignored for any asset class—including crypto.

At the same time, Anthropic is also moving forward with its IPO. The company’s second-quarter revenue is expected to double quarter over quarter to $10.9 billion, and it could achieve quarterly operating profitability for the first time. Deutsche Bank, in its research notes, explicitly pointed out that the landing of these two IPOs “will very likely become a major swing factor for the direction of risk assets this year.”

Narrative Divergence: Why the Crypto Market Still Stalls Under a “Regulatory Tailwind”

One notable phenomenon is that the crypto market is losing correlation with traditional technology stock indices, and this “decoupling” is not happening during periods of regulatory tightening—it is happening at the moment when regulation has achieved historic progress.

The 90-day rolling correlation coefficient between Bitcoin and the Nasdaq Composite fell below 0.1 in April 2026, after previously staying above 0.7 for a long time. There are three reasons worth breaking down behind this fundamental shift:

First, the AI sector’s ability to realize earnings is forming a positive feedback loop with traditional tech stocks. The S&P 500 Information Technology sector currently accounts for 35% of the index’s total capital expenditure, reaching the highest share in history. This means that inflows to technology leaders are not merely a speculative pursuit, but are supported by fundamentals such as verifiable earnings growth and the real infrastructure construction cycle. By contrast, the valuation logic for crypto assets still relies heavily on liquidity expectations and narrative-driven momentum, and lacks similar mechanisms for validating large-scale revenue.

Second, institutional capital is moving away from passive crypto allocations indexed to broad exposure and toward selected, differentiated bottom-up active strategies. This is evident in data showing that U.S. Bitcoin spot ETFs saw net outflows of more than $2.26 billion over two weeks. Capital is not exiting crypto entirely; it is rotating toward tokens and tracks with stronger endogenous growth logic. Some institutional participants describe it as: “Capital is not leaving the crypto-asset space in a unified way; it is rotating into new narratives and away from crowded large-cap risk exposures.” However, the scale of this rotation is nowhere near enough to offset the outflow magnitude from Bitcoin ETFs.

Third, and most importantly, the risk attributes of crypto assets are being repriced. Some data suggests that crypto assets are increasingly taking on characteristics similar to gold and commodities, being systematically de-risked out of traditional “risk asset” investment portfolios. Since Bitcoin ETFs already have mature secondary-market scale, competition for the underlying asset’s existing supply weakens its sensitivity to changes in macro interest rates. The market is conducting a long-term revaluation of crypto assets’ value attributes, and this process is far from finished.

Industry Impact: From Passive Bleeding to Structural Competition

The long-term impact of this capital rotation on the crypto industry is gradually taking shape. It can be summarized across three levels.

Changes in institutional allocation structure. As capital shifts from Bitcoin ETFs to specific tracks (such as AI+crypto integrated businesses), it is changing the way institutions participate in crypto assets. Galaxy Digital’s case is representative of this trend. The company has delivered data center capacity to CoreWeave; a 15-year lease term is expected to generate average annual consolidated revenues exceeding $1 billion, and its adjusted EBITDA in the second quarter has rebounded to around $90 million. This indicates a tangible trend: crypto-listed companies are extending into AI infrastructure businesses to hedge against cyclical volatility in the crypto market.

Internal pressure for narrative realignment. Confidence in pure “crypto beta” is being diluted by cross-track narratives. Some crypto industry participants have publicly suggested that “50% of future returns should be allocated to AI.” This is no longer just a simple allocation suggestion; it is an explicit signal of market sentiment. A deeper judgment is that this market cycle may not be a simple bull-bear switch, but a stage in which risk capital gradually shifts from “rotation within crypto narratives” to a “fusion narrative of crypto and AI, and RWA.” Projects that link real-world assets, institutional needs, and verifiable cash flows will be more valuable for allocation in this evolution.

Effects of global liquidity redistribution. The IPOs of SpaceX and OpenAI are not only milestones within the AI track; they also represent a systemic redistribution of global liquidity. When these companies raise a combined total of about $130 billion from public markets, the result is not only the addition of two “trillion-dollar” technology giants—it also means both global passive and active funds need to readjust their weight distributions in the technology sector. Crypto assets are in a passive position in this adjustment: they are neither included in mainstream index weight accounting nor do they have direct “substitute” allocation options tied to these IPOs. For the crypto market, this is a structural competitive disadvantage.

Conclusion

On May 27, 2026—the day oil prices crashed—Bitcoin traded sideways in the $75,000 range, while Micron broke through the trillion-dollar market cap with a 19.3% single-day surge. Under the same macro event-driven backdrop, the two followed entirely opposite trajectories. This is not a trading mistake; it is a concentrated display of a structural shift in capital allocation. The short-term release of geopolitical risk has not turned crypto into the narrative center—AI infrastructure construction is already taking over the baton of capital allocation.

For the crypto market, this divergence is more like a stress test of its ability to validate value. As OpenAI and SpaceX take the stage with trillion-dollar scale IPOs and AI capital expenditures continue to expand, the crypto market may need to find its own “income-verified” growth path—rather than relying solely on liquidity expectations and narrative-driven beta logic. The market’s multiple-choice question is becoming more specific—and less avoidable.