Crypto Market Falls 5.3% to $2.38 Trillion as Bitwise CIO Warns AI Absorbs Capital

According to Bitwise chief investment officer Matt Hougan, the crypto market has become a "contrarian bet" as capital and attention shift to artificial intelligence stocks. Total crypto market capitalization fell 5.3% to $2.38 trillion, sitting 46% below its October 2025 peak. Hougan noted that NVIDIA shares have gained nearly 1,500% since ChatGPT's public launch in late 2022, while hyperscaler companies plan to deploy over $600 billion on AI buildouts this year.

Hougan argued that, unlike past bear markets where capital retreated to Bitcoin, the current cycle shows rotation into smaller tokens with strong usage metrics. He cited Hyperliquid, Zcash, and Stellar as examples of fundamentals-driven outperformance, with Hyperliquid gaining more than 120% year-to-date. This selective strength suggests institutional allocators are applying equity-style sector analysis to digital assets, indicating that proximity to a cycle bottom may reward projects with measurable revenue and active users.