Bitcoin's 650% rally stalled near $126k as investor focus shifted to AI hardware. Micron hit $1T market cap. Here's what the rotation means for crypto traders.
The capital rotation that began in late 2025 has become definitive. Bitcoin, which surged more than 650% from $15,000 to nearly $126,000 between November 2022 and October 2025, now trades well off those highs. The world's largest cryptocurrency has lost its place as the primary momentum trade on Wall Street. Semiconductor and AI infrastructure stocks have absorbed the speculative flows that once drove crypto.
The source of the rotation is not a single catalyst but a structural shift in investor preference. Memory stocks like Micron Technology and Sandisk now command the premium multiples and daily volume that Bitcoin and Ethereum held two years ago. Micron's market valuation crossed $1 trillion after standing at roughly $70 billion a year earlier. NVIDIA climbed to nearly $225 per share in May before easing to $212, still up significantly from earlier levels. The appetite for AI-related hardware plays has replaced crypto as Wall Street's preferred growth narrative.
The shift follows a pattern seen in prior cycles. Between 2020 and 2022, speculative capital flowed into meme stocks, then into crypto after the 2024 US election. Bitcoin doubled from approximately $55,000 to over $110,000 between September 2024 and January 2025, driven by expectations of a pro-crypto regulatory environment under the Trump administration. The rally peaked near $126,000 before momentum stalled.
Gold followed a similar but delayed trajectory. The precious metal broke out near $2,000 per ounce in early 2024 and surged above $5,200 in February 2026 on fiscal deficit and inflation concerns. That rally also faltered. Gold has corrected nearly 20% and now trades below $4,400 per ounce. The pattern of a parabolic rise followed by rotation out of the asset is consistent across both crypto and gold.
Bitcoin's decline in relative attention is not about its own fundamentals. Network activity remains intact, and institutional custody flows have stabilized after the 2025 ETF launch wave. The issue is competition for marginal capital. AI infrastructure spending, driven by datacenter buildouts and GPU shortages, offers a narrative with visible quarterly earnings growth. Crypto, by contrast, lacks the same earnings-driven catalyst. Semiconductor companies report multi-billion dollar revenue beats tied directly to AI demand. Crypto's best argument – a macro hedge – was undermined by gold's simultaneous rally and correction.
Practical rule: When a sector's narrative becomes a macro hedge, it competes directly with other macro hedges. Gold's 20% drawdown hit crypto sentiment indirectly by showing that no hedge is immune to rotation.
NVIDIA and Micron sit at the center of the AI hardware theme. NVIDIA's stock rallied from below $150 in early 2024 to nearly $225 in May 2026, tracking the AI capex cycle. Micron's surge from roughly $70 billion to $1 trillion in market cap in one year signals extreme appetite for memory as a bottleneck in AI compute. Both stocks now face questions about sustainability of multiple expansion.
AlphaScala data rates NVDA at 71/100 (Moderate) and MU at 84/100 (Strong) on the Alpha Score. The divergence reflects positioning within the semiconductor space: MU benefits from a narrower, higher-conviction thesis tied to HBM (high-bandwidth memory) supply constraints, while NVDA's broader exposure to AI chip demand makes its valuation more dependent on capex growth rates.
The capital rotation thesis is confirmed by relative volume and ETF flows. Crypto-related ETFs have seen net outflows for four consecutive months, while semiconductor ETFs have posted record inflows. The next confirmatory data point will be Micron's quarterly earnings and forward guidance. A beat that triggers further multiple expansion would reinforce the rotation. A miss, however, could expose the froth in memory stocks and potentially send capital back toward crypto or gold.
Risk to watch: If NVIDIA dips below $210 on sustained selling, it would indicate that AI momentum is cracking. That would be the first sign that the rotation may have peaked.
Gold's trajectory provides a cautionary tale. After breaking above $5,200, the metal corrected sharply to below $4,400 – a 15%+ drawdown that erased months of gains. The catalyst was a rotation out of macro hedges into growth assets. Crypto suffered the same dynamics: as AI stocks surged, both gold and bitcoin lost marginal buyers.
Looking forward, investor focus could shift again. SpaceX is reportedly approaching one of the largest IPOs in history. OpenAI and Anthropic may also pursue public listings. If these IPOs materialize, they will compete for the same speculative capital that currently sits in semiconductors. The cycle of rotation is unlikely to end with memory stocks.
Bottom line for traders: The speculative cycle has rotated from crypto to AI hardware. The next leg may be IPO-driven. Traders should watch lock-up expirations and insider transactions in MU and NVDA for signals that early investors are taking profits. If they do, crypto may see a temporary respite – but not a sustained recovery until a new narrative emerges.
Related: Memory Stocks Become New Hot Money Destination as Crypto Fades | NVDA stock page | MU stock page
Prepared with AlphaScala research tooling and grounded in primary market data: live prices, fundamentals, SEC filings, hedge-fund holdings, and insider activity. Each story is checked against AlphaScala publishing rules before release. Educational coverage, not personalized advice.