Is Anyone Still Buying in the Crypto Market? Breaking Down 3 Common “Wait-and-See” Mindsets at the Moment

Author: Back of the Envelope

Compiled by: TechFlow (Shenchao)

Deep Tide Introduction: When AI stocks are going up every day, why buy cryptocurrencies? This is the most common question the author has heard from friends recently. Even the most steadfast crypto believers are quietly reducing their positions, waiting for BTC to drop to $50k. This article breaks down three of the most common wait-and-see mindsets and how they might change under certain circumstances—a rare honest sample for investors and practitioners to understand current market sentiment.

I spend a lot of time chatting with friends about what we’re each investing in. Investing is a way to express beliefs about the future, so conversations about investing are essentially discussions about where we think the world is headed. What’s more interesting than predicting the future?

One of the topics that keeps coming up lately is crypto assets. More specifically, whether people are putting money into digital assets and what the future holds for most tokens. The most common views I hear are:

"There are only 5-10 tokens truly worth investing in."

"I hold some BTC and HYPE, but I've sold off most of my positions in other major coins. The rest are 'set and forget' for me."

"I'm just waiting for BTC to drop to $50k before buying."

A recurring concern is: if you can invest in anything in the universe, why choose digital assets over AI-related stocks (whose revenues might be compounding rapidly)? What belief does holding crypto assets express that is stronger than "future reasoning demand will increase 10x"?

As a result, many of my friends' personal portfolios—including the most ardent crypto enthusiasts—are moving away from digital assets. People are satisfied with their existing positions, waiting for lower prices, and/or simply feel the opportunity cost of putting money elsewhere is too high.

I think it’s worth unpacking the beliefs behind these views. If these beliefs hold for individual investors—whose investment universe is unlimited and every asset must earn its place in the portfolio through absolute advantage—then they likely apply to institutions and funds with broad investment mandates as well. So the question behind this sentiment is: where will the marginal capital flowing into crypto assets come from (and over what timeframe can we expect that)?

Here’s how and why these beliefs might change over the next year. (Of course, all three are interrelated.)

Belief 1: Satisfaction with Existing Positions

My understanding is that many people still believe in a future where digital assets (including digital stores of value) will be more important than they are today, but it’s hard to find near-term catalysts. Market participants don’t want to miss out on a crypto price surge, so they maintain some positions (even if they lack confidence in a quick recovery).

In short: belief in the long-term growth of the category remains, but it’s not where they spend marginal time or capital. What could change this is either an observable catalyst that reignites excitement or a rotation from other parts of the portfolio.

Belief 2: Waiting for Lower Prices

One way to look at this is about short-term timing—people think there will be more selling, so they try to find a better entry point. But timing is hard. If you believe BTC will rise to $200k, entering at $60k vs. $50k won’t make a dramatic difference. So more precisely, I think the logic of "waiting for lower prices" reflects beliefs about the market size and upside potential of crypto assets.

Many factors could change this. First is market timing. Many people believe in a 4-year cycle, which would put the BTC bottom somewhere around the end of Q3/beginning of Q4. If we pass that point without a major crash, we might see more people start reallocating capital to crypto (i.e., fear of missing any rebound). Similarly, if prices crash, there might be a bounceback because people think we’ve hit bottom. Second, perhaps some event changes people’s estimates of upside. For example, if we see sovereign states start allocating capital to digital assets, that would be exciting! Maybe monetary policy changes reignite interest in digital assets. And so on. Finally, reflexivity could play a big role. Even a small price increase could cause people to capitulate (buy back in) to avoid being left out.

Belief 3: Opportunity Cost of Allocation

The question isn’t just "will this asset go up?" but "will it go up more relative to what I can expect from other assets in my opportunity set?" When everything related to AI—memory stocks, photonics, new clouds, chips… you name it—seems to be on a "only up" trajectory, it’s harder to justify putting marginal capital into anything that doesn’t show potential for hypergrowth (assuming growth is what you’re optimizing for). The challenge is that if the AI productivity train decelerates, there is a non-zero chance that other parts of the market will also sell off. But then again, perhaps that marks a bottom (and the start of capital reallocation).

Conclusion

The ideas above reflect sentiments I’ve repeatedly heard in private discussions with highly respected smart people, so this article is intended as a snapshot of current market thinking.

Overall, I guess we are closer to the market bottom for digital assets than to the top. But most importantly, I simply enjoy hypothesizing about the psychology of market participants and considering what beliefs might be expressed through asset prices.

Thanks to Jay Drain Jr., Jesse Walden, Hootie Rashidifard, Julian Fernandez, and many others for conversations and feedback that inspired this article.

All information contained herein is for general informational purposes only. It does not constitute investment advice or a recommendation or offer to buy or sell any investment, nor should it be used to evaluate the merits of any investment decision. It should not be relied upon for accounting, legal, or tax advice or investment recommendations. You should consult your own legal, business, tax, and other relevant advisors regarding any investment. The views or positions expressed herein are not intended to be legal advice or to establish an attorney-client relationship.