Bloomberg’s Joe Weisenthal has reignited and expanded his thesis that the cryptocurrency market is mired in what he terms the “coldest crypto winter ever.” His argument, now comprising 12 points, extends beyond mere price fluctuations to encompass market psychology, capital flows, regulatory landscapes, and the burgeoning influence of artificial intelligence and quantum computing.
In his Odd Lots newsletter and subsequent posts on X, Weisenthal elaborated on his earlier assertion from February, which outlined 10 reasons for the current downturn’s unusual severity. “Everything I cited then still holds,” he stated, adding that two additional factors have since exacerbated the bleak outlook.
Crypto’s Problem Extends Beyond Its Own Market
The crux of Weisenthal’s argument is that crypto’s current weakness is occurring precisely when other speculative market segments are experiencing significant gains. This divergence is crucial. A bear market is one thing when risk assets are broadly under pressure; it is an entirely different proposition when investors witness adjacent trades soaring.
One chart presented in the newsletter illustrated a sharp resurgence in the Goldman Sachs non-profitable tech basket. Kevin Gordon, head of macro research and strategy at Schwab Center for Financial Research, observed that this basket is “mooning again” in a manner reminiscent of the 2021 boom. Another chart highlighted the Goldman Sachs US quantum computing basket, which has also seen a substantial rise following a dramatic rally.
For Weisenthal, this makes crypto’s stagnation all the more painful. “First, other people are making SO MUCH MONEY,” he wrote, pointing to listed Nasdaq companies and other equities that have surged in recent months. He specifically cited SK Hynix, up over 250% year-to-date, and Micron, up more than 260%, arguing that such gains amplify the perception among crypto participants that they are missing out on the market’s primary opportunities. He encapsulated this sentiment with a reference to a famous New York Times headline: “Everyone Is Getting Hilariously Rich and You’re Not.”
The Original 10-Point Case
Weisenthal’s initial February argument, as summarized in the newsletter, posited that the current drawdown is occurring amidst rising anxiety about the U.S. dollar, thereby undermining one of crypto’s traditional macroeconomic narratives. He also contended that crypto can no longer credibly claim to be in its nascent stages, with “crypto Twitter is dead” and institutional adoption having already occurred, diminishing expectations of a future adoption wave.
Furthermore, the regulatory environment, in his view, is no longer a clear future tailwind. He wrote that the current climate is already “about as favorable as it gets,” suggesting that market participants may have limited room to anticipate a significant policy-driven recovery.
Competition for Attention and Resources
Another significant factor is the competition for attention and capital from the artificial intelligence boom. Weisenthal noted that the AI surge is not only straining electricity resources, which directly impacts miners, but is also capturing “all the mental market share.” In his analysis, crypto no longer appears to be the definitive frontier trade for technology-focused investors.
The list also included concerns regarding crypto’s reputation and structural issues. Weisenthal wrote that crypto is “Epstein-adjacent,” referencing its mention in the Epstein files, and highlighted growing apprehension about quantum computing and its potential implications for Bitcoin’s security model. He also singled out digital asset treasury companies, including Strategy, arguing that firms which had previously accumulated Bitcoin are now transitioning to sellers rather than buyers. He pointed to Strategy’s announcement of selling 32 bitcoins as a symbolic reversal for a company long associated with corporate Bitcoin accumulation.
FOMO Without Crypto
The two new points introduced by Weisenthal reinforce the overarching theme: crypto is not merely declining; it is being left behind. Weisenthal suggested that a month prior, he might have characterized individual stock rallies as occurring without a broader speculative mania. Now, he believes, the market is increasingly resembling “some real FOMO everything rally.”
This represents a more pointed claim. If AI, quantum computing, and speculative tech are rallying while crypto remains stagnant, then crypto’s challenges extend beyond liquidity, regulation, or price momentum. They touch upon its very relevance. For a sector that was partly built on being the highest-beta expression of technological change and monetary skepticism, losing the attention trade may be the most unsettling signal of this prolonged winter.
At press time, the total cryptocurrency market capitalization stood at $2.3 trillion.
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