Hesitant AI, Where's the Liquidity?' Bitcoin Powerless, MSTR Falls 8 Consecutive Trading Days | Seo Dong-ju, Kim Dong-hwan, Oh Jin-seok Media Editors [Crypto PLUS]
Speakers
Oh Jin-seok
— Media Editor
Summary
Oh Jin-seok, media editor, reviews the week's market action where AI stumbled but money did not rotate into Bitcoin, causing Bitcoin weakness and MSTR to fall eight days straight. He presents several long ideas in semiconductors and crypto-exposed equities like Coinbase and Block, while urging caution on Bitcoin and heavy avoidance of MSTR common stock. The flow of funds out of gold and Bitcoin into semiconductor ETFs underscores the ongoing AI dominance.
- US markets saw rotation from AI into healthcare and small caps, with Russell 2000 outperforming.
- Bitcoin continued to bleed without fresh catalysts, with ETF outflows hitting the second-highest weekly level.
- Micron Technology got a $2,200 target from Melius Research, reinforcing the memory cycle thesis.
- Coinbase is gaining institutional traction via Base L2, while Ark Invest bought the dip.
- Block (SQ) appears undervalued with ~30% upside to a $97 fair value estimate.
- MicroStrategy common faces structural dilution and premium compression, with consensus that recovery would sacrifice common shareholders.
- Former Bitcoin miners Iris Energy, Hut 8, and Hive Digital are pivoting to AI data centers and attracting hyperscaler interest.
- ETF flow data shows money leaving gold and Bitcoin and rushing into semiconductors like SMH.
Ideas
Memory cycle not over, Micron double
Micron Technology delivered very strong earnings and received a price target of $2,200 from Melius Research, nearly double the current price. This reinforces the view that the memory cycle still has room to run and Micron is attractively valued despite near-term market noise.
Bitcoin unattractive, ETF outflows accelerating
Bitcoin faces limited near-term upside catalysts: money has not rotated from AI even when AI paused, ETF outflows are accelerating, retail sentiment is poor, and the risk-reward versus risk-free bonds is unattractive. Declining ETF cumulative inflows and heavy weekly outflows add pressure.
Coinbase institutional adoption and Ark buying
Coinbase is emerging as a key institutional platform through its low-fee Layer-2 chain Base, attracting significant institutional capital. Ark Invest has been buying Coinbase at depressed levels, signaling a possible bottom. The company is also aggressively pushing into real-world asset (RWA) initiatives.
Block 30% upside to fair value
Block (formerly Square) has a fair value estimate of $97 according to Simply Wall St, while the stock trades around $77, implying about 30% upside. The stock rallied strongly last Friday and the valuation disconnect offers an attractive opportunity.
MSTR common structural dilution risk
MicroStrategy common stock (MSTR) is structurally challenged: the premium to its Bitcoin holdings has imploded, and potential recovery requires aggressive share issuance that would severely dilute common shareholders. With the preferred stock (STRC) breaking its $100 face value, reviving all three instruments simultaneously is impossible, leaving common shares most vulnerable.
Crypto miners pivot to AI data centers
Several former Bitcoin mining companies are successfully pivoting to AI data center and cloud computing services, leveraging their energy infrastructure. Companies like Iris Energy, Hut 8, and Hive Digital are gaining attention from hyperscalers and have seen strong stock performance as a result.
Gold/BTC outflows rotate into semiconductors
Retail money is rotating out of gold and Bitcoin ETFs and pouring into semiconductor ETFs like SMH. Combined with massive AI capex that shows no sign of peaking, this flow shift suggests semiconductors will continue to outperform.
