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According to Fidelity's Jurrien Timmer, the AI trade could be over, and the bull market we've witnessed has a lot of things to do and achieve in order to keep up the bullish pace. The trend continuation is possible, even though the stock market would have to carry more weight on its own.
The AI 'bubble' appears to be reaching its logical conclusion: enormous funding of AI companies like OpenAI and Anthropic couldn't be endless, and with Anthropic coming closer to IPO, some existing investors might finally reap their rewards. Anthropic announced the launch of its IPO roadshow on November 10, with existing stockholders offering part of their holdings alongside newly issued shares.
The equal-weighted S&P 500 chart suggests a relatively healthier market environment, but as Timmer has mentioned, in a 'top-heavy market it may not be enough' to keep carrying the index up.
What about Bitcoin?
Crypto, on the other hand, might benefit from a transitional period on the market, even though it's not guaranteed by any means, as both risk tolerance and available funds appear to be running dry.
The main barrier between Bitcoin and funds from the AI rotation is, as always, volatility and the safety of the cryptocurrency market. The digital assets industry is not the same as it was in the pre-AI era. More risks have arisen: cybersecurity, concerns about Bitcoin's quantum resistance and many other factors that can push fresh investments away.
Bitcoin will be the main asset to benefit from a transition if one happens after all.
The confirmation of a market recovery would only come if we witness specific signs of a bull run on Bitcoin and larger-cap altcoins: higher highs and constant inflows into institutional products like ETFs. Until everything comes together, the end of the AI trade and a rapid transition of funds to crypto looks very unlikely.