Binance Research Says US Stocks Are Pulling Capital Away From Crypto, Leaving BTC Sidelined

Capital is flowing into the US stock market and leaving digital assets relatively sidelined, according to a Binance Research analysis. Buying interest that might otherwise have gone into cryptocurrencies such as Bitcoin is weakening as money crowds into a small group of market leaders tied to themes including artificial intelligence and semiconductors.

Wu Blockchain reported on June 2 that Binance Research sees recent weakness in the crypto market as being driven more by a shift in capital toward US equities than by crypto-specific factors.

Binance Research said the Cboe Dispersion Index has climbed to 42. That is the third-highest level on record and suggests capital flows within the S&P 500 are heavily concentrated in a narrow set of themes.

The firm identified AI, semiconductors, defense, energy and commodities as the sectors drawing inflows. Against that backdrop, Bitcoin is being pushed further out of the market's main capital flows.

Binance Research also said it is too early to conclude that the outflow will persist over the long term. In past periods when concentration in US stocks reached extreme levels, Bitcoin typically formed a bottom within 0 to 20 weeks, with a median of about two weeks.

Absent a crypto-specific crisis, capital rotation into US equities is often temporary, Binance Research said. The crypto market's supply-demand conditions could improve if the US stock rally loses momentum or if flows into spot Bitcoin exchange-traded funds turn positive.