Welcome to The Market Runup! Every week, we’re diving into what happened in the crypto market onchain and off-chain, as well macro developments — so you can get smarter on your Sundays and prepare for the week ahead.

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Interest in AI showed little sign of fading last week. Spurred by continuing news of investments in the sector, especially after SpaceX made good on its promise to buy Cursor for $60 billion, investors have continued allocating capital toward compute, infrastructure, and AI-related businesses.

We saw a continued decline in oil prices as the markets responded positively to an interim U.S.-Iran agreement aimed at reopening the Strait of Hormuz. Crude oil moved sharply lower as investors began pricing in the possibility of improved energy flows and reduced geopolitical risk.

Lower oil prices could have meaningful implications for inflation expectations, consumer spending, and central bank policy over the coming months.

Markets entered the week expecting stability from the Federal Reserve. Instead, investors were forced to reassess their interest rate forecasts after Fed Chair Kevin Warsh signaled a much more hawkish stance than many anticipated. 

The Fed kept interest rates unchanged, but officials increased inflation forecasts, and opened the door to the possibility of additional tightening if inflation remains persistent.

With AI companies continuing to be the new favorite and technology stocks leading the market, crypto has struggled to capture investors’ attention and dollars. Despite ongoing macro uncertainty, investors have shown they’re willing to fund growth, innovation, and long-duration opportunities.

The takeaway: Investors are growing selective, and crypto is no longer as attractive as it was in the face of other opportunities.

Episode 19: Kyle Reidhead on AI, bitcoin and the future of capital

This week on The Market Runup, I sat down with Kyle Reidhead, co-owner and head of research at Milk Road.

Our conversation centered on one of the most important questions today: Has AI become more valuable than money itself?

We also discussed SpaceX’s historic IPO, Bitcoin’s evolving role as a store of value, the growing importance of compute, Fed policy, oil prices, Iran, inflation, and what Kyle believes investors are getting wrong about the next liquidity cycle.

We also explored whether Bitcoin's traditional macro narrative is beginning to break down, and why AI may be attracting capital that previously flowed into crypto.

Compared to previous cycles, digital assets have never had better institutional support, regulatory clarity, financial products, or public image. Yet, investors spent much of last week looking elsewhere. 

SpaceX continued attracting enormous amounts of capital, AI-related companies are commanding premium valuations, and public equities remained remarkably resilient despite ongoing uncertainty around rates, inflation, and global growth. 

For years, digital assets presented a compelling growth story, benefiting from expanding liquidity as they grew into an alternative to standard investment approaches. But crypto always needed to compete for capital, and today, that balance is skewed in the favor of artificial intelligence, compute infrastructure, and ambitious technology companies. 

The next phase of the cycle for crypto may be determined less by adoption headlines and more by capital allocation decisions. If the long-term thesis for digital assets is correct, crypto will need to convince investors that it deserves a larger share of the world's attention, capital, and conviction because it serves actual needs that can’t be met elsewhere.

Spot vs Derivatives Flows (what to watch): While crypto traders focused on liquidations, funding rates and ETF flows, broader markets were directing capital toward different opportunities viewed as more beneficial. This creates a different backdrop for crypto than we've seen in previous cycles.

Historically, Bitcoin often benefited when excess liquidity entered financial markets. Today, that same capital has more attractive places to go.

Cross-asset correlations (what it tells you): Last week's market action highlighted one of the clearest divergences we've seen in months.

While Bitcoin continued struggling to climb above the $65,000 mark, the Nasdaq continued benefiting from AI-related optimism, the S&P 500 remained resilient, and gold held its gains despite more positive geopolitical news.

This resulted in an environment where traditional risk assets, AI-related equities, and even defensive assets all outperformed crypto simultaneously.What’s The Risk Appetite

As evidenced by the strong demand for AI and technology stocks,  investors are still willing to take risk, just not with crypto. 

This week's market behavior suggests that capital is gravitating toward opportunities with stronger growth narratives. Meanwhile, crypto continues searching for a catalyst that will help it compete for the same attention and capital.

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This information is for entertainment purposes only. It should not be considered financial advice, nor should it be used to make investment decisions. Cryptocurrencies are high risk and you should consult a financial professional before making any financial decisions. Make sure you do your own research.