Crypto markets showed renewed vitality this week, driven by the longest sustained inflow streak into US spot Bitcoin exchange-traded funds since April and a rally in crypto-linked stocks amid growing optimism over US regulatory progress. Equally notable, however, is a development outside the digital asset space: artificial intelligence's hold on speculative capital appears to be loosening.

After nearly two years of market dominance, the AI trade is growing more selective as investors increasingly separate companies with sustainable earnings from those carried by hype. The Philadelphia Semiconductor Index (SOX) recently entered a technical bear market, having declined 20% from its recent peak, though it remains well above year-ago levels.

Some analysts view the shift as a potential early signal of a broader capital rotation back into digital assets. While it may be premature to declare a lasting trend, the combination of improving regulatory clarity, recovering ETF demand, and waning AI enthusiasm has created a more favorable backdrop for crypto than has been seen in months.

Bitcoin ETFs Notch Six-Day Inflow Streak

US spot Bitcoin ETFs extended their inflow streak to six consecutive trading days, drawing $203.1 million in fresh capital as institutional demand showed tentative signs of recovery. The latest inflows brought the six-day total to approximately $930 million, representing the funds' longest winning streak since April. Bitcoin briefly traded above $67,000 during the period.

The renewed demand coincided with improving market sentiment. The Crypto Fear & Greed Index recovered from "extreme fear" to "fear." Since their January 2024 launch, US spot Bitcoin ETFs have accumulated $51.8 billion in cumulative net inflows and now hold $80.9 billion in net assets, though they remain down $4.84 billion on a year-to-date net flow basis. The funds allow investors to gain Bitcoin exposure through standard brokerage accounts without the operational and custody burdens of holding the asset directly, broadening access for institutional and retail participants. Analysts indicated that Bitcoin needs to hold above the $65,000–$65,500 range to build the case for a sustained bullish breakout.

Crypto Rally Builds as AI Trade Cools

The rally in Bitcoin and the broader digital asset market aligned with progress on US crypto legislation and signs of cooling in the AI trade, reinforcing expectations that capital may be rotating back into crypto.

Crypto-related equities rallied alongside the broader market, with Coinbase, American Bitcoin, and Cipher Digital each posting double-digit percentage gains. Sentiment improved after US Treasury Secretary Scott Bessent said lawmakers were at the "1-yard line" on the CLARITY Act, legislation designed to establish a comprehensive regulatory framework for digital assets that would clarify the long-disputed boundary between SEC and CFTC jurisdiction over tokens.

Analysts also cited fading momentum in AI equities as a potential catalyst. FRNT Financial CEO Stephane Ouellette said that slowing enthusiasm for AI stocks, combined with growing confidence in the interest-rate outlook, could support a Bitcoin breakout. The SOX Index, a widely followed benchmark for AI chipmakers, had recently fallen more than 20% from its recent high amid concerns over elevated valuations and AI infrastructure spending.

AI Infrastructure Deals Lift Bitcoin Mining Stocks

Bitcoin mining stocks surged after Hut 8 and IREN announced multibillion-dollar AI infrastructure agreements, reinforcing the sector's strategic pivot toward data centers and cloud computing at a time when the April 2024 halving cut block rewards from 6.25 to 3.125 BTC per block, intensifying pressure on revenue models tied primarily to mining.

Hut 8, IREN, Cipher Digital, CleanSpark, and MARA Holdings each advanced after Hut 8 disclosed a 15-year, $9.8 billion lease for its AI data center campus and IREN revealed $2.8 billion in cloud services contracts with AI developers. The transactions highlight how miners are diversifying beyond Bitcoin production as mining economics become increasingly challenging. IREN now projects more than $4 billion in annual recurring AI cloud revenue by the end of 2026.

While investors have responded positively to the AI pivot, analysts note that it raises new questions around execution and funding. Blocksbridge Consulting estimates the sector will need approximately $50 billion in additional capital to realize its AI ambitions, even as insider stock sales have drawn heightened scrutiny.

Bernstein Points to Tokenization and Prediction Markets for Robinhood Growth

Bernstein raised its price target on Robinhood, arguing that the brokerage's long-term growth will be driven by tokenized assets and prediction markets rather than conventional crypto trading.

The investment firm increased its price target on Robinhood shares to $160 from $130 while maintaining an Outperform rating. Analysts forecast that prediction markets will become the company's fastest-growing business line, generating $1.7 billion in revenue by 2028. Bernstein also identified tokenized equities as a significant growth opportunity, pointing to Robinhood's Arbitrum-based layer-2 network as critical infrastructure for bringing real-world assets onchain.

The bullish assessment comes as Wall Street accelerates its tokenization efforts, with firms including Broadridge, Alpaca, Securitize, and Cantor Fitzgerald expanding blockchain-based securities infrastructure. The tokenization market has drawn projections in the trillions of dollars from institutions including BlackRock and McKinsey, positioning it as one of the most closely watched growth areas in digital finance. Bernstein identified prediction markets, perpetual futures, and tokenized equities as the key competitive battlegrounds for Robinhood going forward.