CoinDesk
Bitcoin's recent weakness is less about fading institutional demand or Michael Saylor's bitcoin sales and more about losing its status as the market's dominant momentum trade, according to Charles Schwab analyst Jim Ferraioli. "Bitcoin has been in a bear market since October," he said. "Not to say it's as simple as that, but it's kind of simple as that."
The argument lands against a backdrop of otherwise bullish structural developments: spot ETF approvals, billions in institutional capital, and movement on the Clarity Act in Washington. Yet the price has struggled to sustain the kind of rally investors expected, and Ferraioli believes the gap is explained by capital rotation rather than regulatory or demand-side failure.
Why it matters
"Crypto investors historically just go wherever the momentum is," Ferraioli said, "and momentum is out of crypto at the moment." The destinations for that capital have shifted this cycle. Gold has absorbed significant inflows as an alternative to both equities and crypto, while AI-linked equities and anticipated IPOs from firms like OpenAI and Anthropic have become the dominant speculative narrative.
Notably, crypto-native infrastructure is accelerating the rotation rather than fighting it. Platforms such as Hyperliquid (HYPE) have introduced perpetual contracts tied to private companies, commodities and other non-crypto assets, letting momentum traders redeploy capital without leaving the on-chain rails they already use. "Some of these you can actually access the private shares on these decentralized exchanges on Hyperliquid," Ferraioli noted. For bitcoin, the implication is uncomfortable: it is now competing against every major speculative narrative in the market, not just other tokens.
Market impact
Ferraioli downplayed the market impact of Strategy's recent sale of 32 bitcoin — a transaction that rattled Saylor-bulls but, in his read, has been over-weighted as an explanation.
Frequently asked questions
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Why is bitcoin underperforming despite spot ETF inflows and regulatory progress?
Charles Schwab's Jim Ferraioli argues the weakness isn't demand- or regulation-driven — it's momentum-driven. Capital that historically chased crypto has rotated to gold, AI equities and IPOs, so positive structural developments haven't translated into sustained buying pressure.
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What role does Hyperliquid play in the capital rotation out of bitcoin?
Hyperliquid (HYPE) lists perpetual contracts on private companies, commodities and other non-crypto assets. Ferraioli says this lets crypto-native traders chase momentum in IPOs and AI names without leaving on-chain rails, accelerating the rotation away from BTC.
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Does Strategy's sale of 32 bitcoin matter for the market?
Ferraioli downplayed the sale's impact, calling the Saylor-as-cause narrative overstated. He views it as a convenient story attached to a broader rotation already underway, driven by ETF investors exiting at breakeven rather than adding.
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Is bitcoin a retail or institutional asset?
Ferraioli describes bitcoin as 'primarily a retail asset.' ETF access has expanded reach, but the marginal buyer still tends to chase trends rather than allocate on discounted-cash-flow frameworks, which is why regulatory wins have failed to ignite a sustained rally.
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Could the Clarity Act or other regulation reverse bitcoin's underperformance?
Ferraioli believes regulatory clarity supports adoption over the long term but won't reverse the current trend on its own. With summer seasonality historically bitcoin's weakest stretch and downside-protection demand still easing, the structural tailwinds remain real but aren't yet the trade.
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