According to Quinn Thompson, CIO at Lekker Capital, Bitcoin continues to show warning signs as his fund remains firmly bearish on the crypto heading into summer.
Thompson says the market faces a combination of structural challenges, including lingering concerns about digital asset treasury (DAT), unresolved questions regarding Strategy’s STRC preferred stock, and lingering fears about quantum computing risks to Bitcoin’s security model.
Combined with weakening liquidity conditions and strong selling pressure, these factors have contributed to one of the largest divergences between bitcoin and tech stocks in recent history, with the crypto significantly underperforming despite continued strength in much of the tech sector.
Thompson’s broader concerns extend beyond crypto and believe that a wave of blockbuster IPOs (SpaceX, Anthropic, and OpenAI) could absorb billions of dollars of investor capital, creating a liquidity drain.
One of the clearest signs for Thompson is the Magnificent Seven’s underperformance relative to the Nasdaq as a whole. Historically, healthy bull markets are characterized by leading leaders. Today, however, much of the index’s gains are driven by semiconductor and AI supply chain names rather than the hyperscalers that sparked the initial rally.
The challenge for these hyperscalers is growing, Thompson says. Massive AI-related capital spending commitments are straining free cash flow, increasing debt levels and reducing share buybacks.
Yet cutting spending could hurt trade in the semiconductors and AI infrastructure that supports the entire technology complex.
Thompson concludes that the increasing supply of IPOs is poised to compete for capital and investor attention, while he sees a tough road ahead for both AI leaders and the market as a whole.
