Crypto vs AI: Dragonfly Capital Says Market Shift is 'Capitalism Doing Its Job' for Bitcoin and Ethereum

The narrative that artificial intelligence (AI) is outperforming the cryptocurrency sector is misguided, according to Haseeb Qureshi, managing partner at Dragonfly Capital. In a recent analysis, he argues that capital flowing from crypto to AI is simply "capitalism doing its job," reflecting a natural market rotation rather than a fundamental loss for digital assets. Qureshi highlights that venture capital is inherently cyclical, chasing the next high-growth narrative. The current excitement around AI, similar to previous cycles in crypto, attracts investment. However, this does not diminish the long-term value proposition of blockchain technology, Bitcoin (BTC), and Ethereum (ETH). He points to the robust development activity and real-world adoption in the crypto space as signs of underlying health. The venture capitalist draws a parallel to the dot-com era, where capital shifted rapidly between sectors before sustainable winners emerged. He suggests that the crypto market is maturing, with capital now being deployed more selectively into infrastructure and decentralized applications (dApps) rather than speculative tokens. This phase, according to Dragonfly, is crucial for building a more resilient and valuable ecosystem for major cryptocurrencies like BTC and ETH in the long run.