Bitcoin Bulls Grope Around for the Floor

Bitcoin’s still sinking in quicksand, and it’s unclear when investors will feel like throwing it a rope. The top token by market cap plummeted below $60,000 this month for the first time since 2024, and this week, it’s worth less than half the record it set last October. 

The token briefly rallied along with the broader market on June 15, climbing above $67,000, on hopes that the US-Iran conflict is closing in on a resolution. But it has since pared its gains for myriad reasons, starting with bitcoin’s biggest corporate bull blunting his horns. 

No More Smooth Sayling

Michael Saylor spooked investors in early June by announcing that his company, Strategy, had sold off 32 bitcoin for about $2.5 million. The digital pile is tiny compared with Strategy’s total holdings, but the sale was the company’s first time parting with even a grain of sand off the top of its massive bitcoin hoard since late 2022’s crypto winter.

Investors seemed to take Saylor’s announcement as a signal that Strategy, and its underlying asset, could face rough waters ahead. Strategy shares were down about 30% for the month as of the end of last week. STRC, a dividend-paying stock issued by Strategy to raise capital the company uses to buy bitcoin, has been below its intended $100 anchor since mid-May. That’s fueling concerns about Strategy’s ability to keep doling out dividends and the possibility that it’ll need to sell more bitcoin to keep its stockpiling cycle spinning. 

Strategy’s struggles may have made investors extra-sensitive to other events that have happened since:

• Bitcoin and other tokens dipped last week after Fed Chair Kevin Warsh’s first FOMC meeting made rate hikes seem more likely later in the year. Cryptocurrencies aren’t investors’ favorite investment vehicle when they’re anticipating higher costs. 
• Crypto-exposed stocks, including Coinbase and Robinhood, meanwhile, joined a wider tech rally, rising as bitcoin and other tokens continued to fall. Even Strategy’s stock rose slightly. But instead of pulling crypto tokens up with them, tech stocks and shiny new IPOs like SpaceX’s could be pulling risk-seeking investors away from crypto. 

Don’t Look Up: Coinbase CEO Brian Armstrong said that he expects bitcoin to bottom out at around $60,000. Crypto exchange Kraken, meanwhile, noted that bitcoin has fallen below its 200-week moving average twice this month, which in the past has signaled an imminent bounce-back. But crypto isn’t exactly known for its predictability, and investors will be watching for major events that could swing its price, like the possible passage of the Clarity Act.

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