One Year, One Hot Topic: Interpreting the Marginal Buyers in the Market

Author: BowTied Bull Translation: Shan Ouba, Golden Finance

Currently, the cryptocurrency market is in a bear market, and public opinion has returned to the old narrative of 2022: "Bitcoin is doomed?" "The crypto industry is coming to an end?" The answer is all negative. A more worth exploring question is: how to attract marginal buyers into the market?

What market participants truly need is a reasonable logic for increasing allocation to crypto assets (or any other asset class). Nowadays, the popularity of artificial intelligence and SpaceX remains high, making it difficult for the crypto industry to capture market attention again.

Speculation-driven markets are not dominated by fundamentals; capital flow and attention are the core factors determining price trends.

Looking back at various market trends over the past decade clearly reveals this pattern: the crypto boom, marijuana concept stocks speculation, electric vehicle rally, social media sector strength, and now the AI hype (inevitably some omissions, but the core logic is obvious). By 2026, almost all marginal buyers in the market will be chasing AI concepts or directly benefiting from AI-related targets.

The market may see multiple sectors rising simultaneously, but the top hype that captures nationwide enthusiasm usually only occurs once a year. When a certain asset class no longer becomes the focus, marginal buyers will exit en masse unless new sufficient reasons emerge, prompting them to reorient their investments.

Part One: Hype-driven Liquidity Vacuum

In 2026, the core concern for hedge funds and public funds is: "What should be the allocation ratio of AI-related assets in our holdings?" Both OpenAI and Anthropic have submitted IPO prospectuses, and SpaceX is scheduled to determine its offering price on Thursday evening. Major institutions must make investment decisions regarding these three companies. These companies have huge market capitalizations, and their allocation ratios in weighted portfolios will directly impact overall returns. Public funds need to decide: follow the market standard (e.g., 0.5% position), or adjust the ratio up or down. Over the past decade, many fund managers have been dismissed for under-allocating to the tech sector, which has become an industry norm.

Just OpenAI, Anthropic, and SpaceX alone will have a total market cap of 3 to 4 trillion USD. A misjudgment in allocation could lead to severe investment losses. This is not a small position that can be ignored; institutions must clarify their position sizes and allocation logic, and by year-end, they will inevitably face client inquiries.

Underlying Deep Logic

If you understand that market trends are more driven by sentiment than purely by P/E ratios, you will recall the classic investment research report "Illusions of Glamour." This report summarizes four major market features: 1. Investors tend to herd and follow trends; 2. High trading volume continuously attracts new buyers; 3. Media coverage amplifies hype; 4. Prices experience sharp volatility.

These four points are the main incentives behind herd trading behavior.

It’s not hard to see that herd operations driven by fanatic sentiment often lead to investment losses. For novice investors, a practical rule is: sell when market sentiment is high, and buy in the opposite direction when a certain asset class is widely bearish. This experience is far more practical than hundreds of financial textbooks.

Looking at longer cycles: when the market is in AI nationwide frenzy, the performance of other non-AI sectors should be far better than now. In other words, capital flow is being completely reshaped, affecting all asset classes. For institutional investors, the impact mainly concentrates on the tech sector; while ordinary retail investors, not bound by the "only invest in tech" rule, have more freedom of choice. Once retail funds flock into AI tracks, they tend to neglect other industries.

Historical Cycles: Similar Trends Recur

The most comparable case for this round of hype is the internet tech bubble of the 1990s. Not only because tech stocks were valued at extreme levels, but because this boom attracted all investors with stock accounts to participate en masse.

At that time, the tech sector perfectly matched the four features of liquidity vacuum: even though its market cap was not dominant in the entire stock market, trading activity was unprecedentedly hot. Herd mentality, huge transaction volumes, intense price swings, and media coverage all appeared simultaneously.

Using this as a reference, current focus should be on tracking the trading volume of SpaceX, Anthropic, OpenAI, and other AI-related targets, comparing the ratio of trading volume to market cap to gauge market enthusiasm: if trading volume far exceeds normal levels, it indicates the entire market is focused on this; if daily trading volume even surpasses the company's total market cap, it can be judged that the market has entered a bubble and frenzy stage.

When funds withdraw from hot speculative assets, the exiting capital will seek new investment targets, leading to a phenomenon: even if the hot sectors decline sharply, the overall market index can still remain at historic highs. To clarify: after the 2001 internet bubble burst, the market also experienced macro shocks like 9/11, and the trend was influenced by multiple factors.

Simple Summary

When the market forms a clear narrative of hot topics, a large amount of capital will inevitably exit from these hype assets. This trend is almost a certainty: employees of SpaceX, Anthropic, and OpenAI hold equity, and after the companies complete IPOs and cash out smoothly, most will choose to buy property and diversify investments, seeking new allocation directions for their huge funds.

Looking at the post-bubble trend of the internet industry, it’s clear that in the years following 2001, most assets outperformed the tech sector. Although tech stocks later surged again, there was a significant correction period, which was an ideal window for allocating assets outside of AI.

Comparing the returns of major assets from 2002-2007 with the Nasdaq index shows that cash and fixed income assets performed mediocre over the long term. Unless faced with a deep recession like the 2008 financial crisis, holding cash and bonds long-term is not an optimal choice.

For investors under 60, allocating to real estate, stocks, commodities, and other assets generally yields higher returns than AAA-rated fixed income products. The reason is simple: one asset class will eventually enter a bull market, and its returns will outpace low-interest-rate fixed income.

Part Two: Long-term Value Assets Still Have Opportunities

Undoubtedly, the current market is in a typical bear phase. We predicted this turning point as early as last November. But investing always requires a future-oriented perspective; we shift our focus back to the crypto market.

Combining previous asset return data, it’s easy to see: after the hype narrative switches, former bubble assets will become sources of capital for other markets. This is crucial: huge funds flowing out of hot sectors will flood into new investment areas.

From a macro perspective, the rise of real estate after the internet bubble burst is entirely reasonable. Setting aside the relatively loose industry policies at that time, from a psychological standpoint, if someone suddenly gains huge wealth overnight, their first instinct is to buy a house. Of course, there are exceptions, but over 90% of ordinary people will prioritize purchasing their own residence.

Back then, the internet industry created many new millionaires. Some continued holding stocks, eventually losing wealth, while many others cashed out and invested part of their funds into real estate.

Applying this logic to today’s AI and SpaceX hype: when this cycle experiences a phase correction, the core question becomes—where will the large-capital exiters invest their money?

You can logically deduce: will new millionaires hoard gold and silver? Will they buy short-term government bonds? Will they allocate to crypto assets? Or commodities?

Instead of fixating on hot topics like chatbots, think about a core question: where will employees of SpaceX, Anthropic, OpenAI put their funds?

Please seriously consider this: don’t project your own investment preferences onto them. Instead, analyze their personalities, interests, risk tolerance from their perspective; the conclusions will be more realistic.

At the end, a reference for high-net-worth asset allocation (not limited to tech industry elites, but also including older groups with minimal digital exposure). ###