Bitcoin Has Lost Its Momentum Trade, Says Charles Schwab Director

June 12, 2025 — Bitcoin has fallen more than 16% over the past month while the S&P 500 gained 5%, a divergence driven less by crypto-specific problems and more by investors chasing opportunities in AI stocks, commodities and anticipated IPOs, according to Charles Schwab’s Jim Ferraioli.

Immediate Details & Direct Quotes

Charles Schwab’s director of digital currencies research and strategy, Jim Ferraioli, told crypto media that Bitcoin’s inability to keep pace with U.S. equities stems largely from a loss of speculative momentum rather than a lack of positive industry developments.

“Bitcoin has been in a bear market since October,” Ferraioli said. “Not to say it’s as simple as that, but it’s kind of simple as that.”

The crypto industry has secured spot ETF approvals, attracted billions from institutional investors and moved closer to regulatory certainty in Washington over the past year. Despite those catalysts, Bitcoin has failed to produce the sustained rally many market participants expected.

Ferraioli linked a February rebound to renewed enthusiasm around institutional adoption and another successful Wall Street ETF launch, but said buying interest failed to develop into the speculative surge seen in previous market cycles.

Market Context & Reaction

According to Ferraioli, Bitcoin now competes with a growing range of speculative opportunities for investor capital. Historically, crypto markets have benefited when digital assets represented the most attractive speculative option available, but capital flows have shifted elsewhere.

“Crypto investors historically just go wherever the momentum is,” Ferraioli said. “And momentum is out of crypto at the moment.”

Recent capital has moved into gold, commodities and equities, with artificial intelligence now the dominant narrative attracting speculative money. Companies tied to AI infrastructure, advanced computing and data center expansion have delivered strong returns. Investors have also focused on anticipated public listings from firms such as OpenAI and Anthropic.

Ferraioli pointed to growing interest in private market opportunities, including Elon Musk’s SpaceX reportedly preparing for an IPO that could value the company at up to $1.8 trillion. Expected listings could collectively raise more than $200 billion.

“I think people that are excited about momentum are getting excited about IPOs,” Ferraioli said. “Then some of these you can actually access the private shares on these decentralized exchanges on Hyperliquid.”

U.S. spot Bitcoin ETFs recorded $483 million in net outflows on June 2, extending an 11-session withdrawal streak that removed more than $3.4 billion, according to crypto.news. On May 26, BlackRock’s IBIT spot Bitcoin ETF recorded a $1.26 billion off-exchange block transaction, described by research firm NYDIG as a large investor rapidly reducing exposure.

Background & Historical Context

Ferraioli dismissed suggestions that Strategy’s sale of 32 BTC played a major role in Bitcoin’s recent weakness. While the transaction attracted attention because of executive chairman Michael Saylor’s reputation as one of Bitcoin’s strongest advocates, Ferraioli said the sale became a convenient explanation for a trend already underway.

“The narrative has been that they’ll never sell,” Ferraioli said. “But I don’t think [the sale] is what’s really driving it.”

Investor positioning may be contributing more to the weakness. Ferraioli said some holders who endured sharp swings over the past year may be using recent price recoveries as an opportunity to exit the market.

“I think you get to those levels and you get people that are saying, ‘Hey, I made my money back, maybe I’ll revisit it later,'” he said.

Separate analysis from Binance Research linked Bitcoin’s weakness to competition for investor capital, arguing that money has increasingly moved into AI, semiconductor, defense and energy stocks, creating what it described as a “capital black hole” that leaves fewer funds available for Bitcoin.

Ferraioli believes institutional participation remains smaller than many investors assume. “Again, this is primarily a retail asset,” he said, explaining why positive developments such as advancing crypto legislation have not translated into immediate price gains.

What This Means

Summer seasonality could add another challenge. Ferraioli noted that trading activity has historically slowed during the summer months, a period that has often produced weaker performance for Bitcoin.

Ferraioli argued that regulation, institutional adoption and product launches remain supportive long-term developments, but none can guarantee higher prices if market participants continue finding more attractive places to deploy capital.

“There’s a lack of a reason to be buying here when there’s other things you can choose,” Ferraioli said.

While the industry awaits potential progress on the Clarity Act and other regulatory measures in the U.S., Ferraioli said those developments alone may not be enough to attract capital back into Bitcoin while investors remain focused on AI stocks, IPOs and commodities.