Shared Experience

“Shared Experience” – a cartoon showing how stock market traders, once accustomed to relatively stable and steady returns, are now enduring the stomach-churning volatility long associated with crypto markets.

Last week, Microsoft rose more than 15% in a single day and added roughly $450 billion in market value (the most ever added in the history of US stock market). Meanwhile memory stocks moved sharply in the opposite direction, with SanDisk falling around 50% after rising thousands of percent and SK Hynix, Micron and Samsung also suffering steep declines. China’s CXMT then rose 466% on its first day of trading and became the most valuable company listed in mainland China, demonstrating how quickly a compelling AI narrative can now create or destroy hundreds of billions of dollars.

These moves increasingly resemble crypto markets because expectations can overwhelm current performance, while leverage turns an initial decline into forced selling that pushes prices down further and triggers yet more liquidations. Crypto investors experienced the same dynamic during the major Bitcoin and Ethereum sell-offs of 2021, as well as during the collapse of Three Arrows Capital in 2022, when falling asset prices exposed a heavily leveraged portfolio that could no longer support itself.

A similar pattern affected Situational Awareness, an AI-focused fund that had delivered returns of more than 1,000% and grown beyond $20 billion before losing 67% in July, after which margin pressure forced it to sell most of its public holdings and largely dismantled the strategy that had driven its rise.

The important difference is that AI infrastructure companies have real customers, substantial revenue and products for which demand currently exceeds supply, whereas many crypto projects have struggled to connect token valuations with lasting commercial adoption.

Even so, the structure of the two markets is converging as tokenized shares expand global access and autonomous agents begin managing portfolios through programmable financial infrastructure, which is why Nasdaq CEO Adena Friedman has described tokenization as “the next leg of innovation for securities markets.”

So while stocks are not becoming crypto assets, the markets around them are becoming software, making investing more global and automated making stockmarkets more volatile.