Hello Trader,
Software woke up over the past few weeks.
Palantir and Microsoft dragged the whole sector back into the conversation. It is now going toe-to-toe with semiconductors for the strongest theme in tech.
Here’s the part I like. The crowd still hasn’t figured out what it’s looking at.
That gap between what price is doing and what people believe is where I make my money. It also buys you time to get positioned before everyone else catches up.
So I want to show you three things today:
Why the AI panic around software has it completely backwards…
Which sector picks up the baton next…
And exactly how I’m playing it right now…
The Software Fear Has It Backwards
The story going around is that AI eats software alive. That take lumps every name in the sector into one pile.
I see it the other way. AI is the thing that separates the real businesses from the pretenders.
Companies with actual distribution, actual data, and actual customer workflows are about to pull away. The ones coasting on subscription revenue are in trouble.
Some of those weaker names get wiped out. The bears are right about that much.
But the survivors are the whole story.
They come out the other side with better products, fatter margins, and fewer competitors than they had going in. That is a powerhouse setup.
That is where the value sits. It also explains how this sector keeps rallying while everyone argues over its obituary.
Price has been quietly agreeing with me.
Look at what’s leading this move. These are not the speculative leftovers from the last cycle. They have the balance sheets and the customers to actually put this technology to work.
Where The Next Trade Is Setting Up
Software is working now. So I’m already hunting for whatever comes after it.
I think I found it. And it happens to be a cult-like sector that is losing some of its most devoted followers.
Crypto has been bleeding conviction from the exact people who swore they’d never sell a single coin.
Do me a favor and pull up a weekly chart of Bitcoin. Drop a correlation study against software on the bottom panel.
Today there’s barely any relationship between the two.
Now scroll back to the start of 2022.
The picture changes fast. There were multiple stretches where Bitcoin and software moved together, and none of that happened by accident.
Crypto has basically been trading like a high-beta software stock.
Software rallies on risk appetite or some innovation narrative, and crypto amplifies the move. Software sells off on AI disruption fears, and crypto goes right along with it.
Divergences between the two have preceded strong Bitcoin rallies before. Worth keeping in mind while the correlation sits where it does today.
The fundamental case is where this gets interesting.
Modern software needs money that traditional finance simply cannot provide. Autonomous AI agents make that need obvious.
Think about what an agent has to do just to function.
It needs to hold a wallet. It needs to make micropayments for data, compute, and services around the clock, without waiting on a bank account or a KYC check.
Blockchains and stablecoins do that job. Low-cost, instant, global, composable rails that run at machine speed.
Scale up the agents and you scale up real demand for on-chain activity. You also scale up demand for the networks running underneath it.
That turns blockchain into infrastructure instead of a lottery ticket.
The price correlation reinforces all of this in risk-on tape. The agentic AI thesis gives you demand that has nothing to do with speculation.
How I’m Positioned
I’m also keeping an eye on the lid that’s formed in the U.S. Dollar.
A capped dollar lifts one of the heaviest weights off this asset class. Give that some time and it becomes a serious tailwind.
Here’s what I know for sure.
Bitcoin is coiled up tight. Something big is coming out of this range.
I’ve got a plan for either direction.
Break lower and I’m aggressively buying the dip while everyone else is panicking. That’s usually where the best entries live.
Break higher and it confirms a longer-term bottom is already behind us.
Either way I have something to do. That beats sitting on my hands hoping for one specific outcome.
My Trinity Terminal is tracking this same compression. I’ll flag the levels that matter the second they start to give way.
Software just taught the crowd a lesson it refused to learn.
Crypto is lining up to teach the same one. This time you can be early instead of late.
Put this on your radar this week.
As always, I’ll keep you posted,
Take Care,
Gianni Di Poce
