In-context learning (ICL) is a powerful ability that emerges in transformer models, enabling them to learn from context without weight updates. Recent work has established emergent ICL as a transient phenomenon that can sometimes disappear after long training times. In this work, we sought a mechanistic understanding of these transient dynamics. Firstly, we find that—after the disappearance of ICL—the asymptotic strategy is a remarkable hybrid between in-weights and in-context learning, which we term “context-constrained in-weights learning” (CIWL). CIWL is in competition with ICL, and eventually replaces it as the dominant strategy of the model (thus leading to ICL transience). However, we also find that the two competing strategies actually share sub-circuits, which gives rise to cooperative dynamics as well. For example, in our setup, ICL is unable to emerge quickly on its own, and can only be enabled through the simultaneous slow development of asymptotic CIWL. CIWL thus both cooperates and competes with ICL, a phenomenon we term “strategy coopetition”. We propose a minimal mathematical model that reproduces these key dynamics and interactions. Informed by this model, we were able to identify a setup where ICL is truly emergent and persistent.