Bitcoin continues to show warning signs, according to Lekker Capital CIO Quinn Thompson, as his fund remains firmly bearish on cryptocurrencies heading into the summer.
Thompson maintains that the market faces a combination of structural challenges, including ongoing concerns about digital asset treasury (DAT), unresolved questions about Strategy STRC’s preferred stock, and lingering fears about the risks of quantum computing to Bitcoin’s security model.
Combined with weakening liquidity conditions and heavy selling pressure, these factors have contributed to one of the biggest divergences between bitcoin and tech stocks in recent history, with cryptocurrencies significantly underperforming despite continued strength across much of the tech sector.
Thompson’s broader concern extends beyond cryptocurrencies, and he believes that a wave of blockbuster IPOs (SpaceX, Anthropic and OpenAI) could absorb trillions of dollars in investor capital, creating a liquidity drain.
One of the clearest signs for Thompson is the underperformance of the Magnificent Seven relative to the Nasdaq overall. Historically, healthy bull markets are characterized by leaders who lead. Today, however, many of the index’s gains are being driven by AI and semiconductor supply chain names rather than the hyperscalers that sparked the initial rally.
The challenge for those hyperscalers is growing, Thompson says. Massive AI-related capital spending commitments pressure free cash flow, increase debt levels, and reduce share buybacks.
However, cutting spending could undermine the trade in semiconductor and artificial intelligence infrastructure that has underpinned the broader technology complex.
Thompson concludes that the growing IPO supply will compete for capital and investor attention, while he sees a difficult path ahead for both AI leaders and the broader market.
