Bitcoin has added around 0.9% in the past 24 hours to $64,700, while the broader CoinDesk 20 (CD20) is up just 0.16%. Strength in equity markets, which have climbed to record highs, appears to leave the crypto sector unperturbed.
Crypto appears to be moving to the perceived safety of the biggest tokens, with bitcoin and ether the only CD20 members in positive territory. Zaheer Ebtikar, the chief strategy officer at crypto neobank Plasma, told CoinDesk altcoins are struggling “without aggressive support from bitcoin momentum.”
Altcoin open interest has fallen about 15% over the past month while bitcoin has gained roughly 8%, Ebtikar said. CoinMarketCap’s Altcoin Season index fell one point from Wednesday to 42/100.
“Because Bitcoin has moved into capital markets plumbing with ETFs, basis trading, institutional hedging, and collateral, that flow doesn't need a rally to justify itself. However, most of the altcoin market hasn't made that transition yet,” Ebtikar said.
The divergence, according to Ebtikar, results from projects failing to clearly define how value accrues, making them unable to justify investors’ exposure to their tokens during market declines.
Adding to that, tech stocks are seeing weakness. Nasdaq 100 index fell while the S&P 500 and Dow Jones Industrial Average rose. That’s after Elon Musk’s SpaceX (SPCX) reported its first results since going public in June.
The IPO unveiled a massive surge in AI-linked capital spending that investors punished, bringing shares down 13% before the closing bell. The AI trade has been widely blamed for capital rotating out of the crypto sector. Its reversal could help renew enthusiasm.