Bitcoin bloodbath plunges Strategy into Its deepest financial hole yet

MicroStrategy’s unrealized loss is at an all-time high following Bitcoin’s plunge below sixty-two thousand dollars, sending the company’s treasury investment into the red big time.

The loss is sitting near $10.8 billion, putting Strategy down about 17% on its Bitcoin position after six years of buying.

The fall came as Bitcoin hit its lowest price since the start of the Iran conflict, with fresh fighting in the Middle East hurting wider risk sentiment.

The coin fell more than 5% in early Singapore trading on Thursday and dropped below $62,000 for the first time since Feb. 6. The weekly damage is now near 16%, and the pressure started after Michael Saylor’s Strategy sold about $2.5 million worth of Bitcoin from its huge stash.

Strategy faces its largest paper loss after selling 32 Bitcoin before the crash

Strategy (NASDAQ: MSTR) sold 32 Bitcoin between May 26 and May 31 at an average price of $77,135 per coin. The company later reported the sale, but the information was only made public on June 1.

Since that sale, the value of Strategy’s Bitcoin position has fallen by about $11.8 billion, and yes the sale is small compared with the size of the company’s holdings, but these guys have spent years building its name around Bitcoin accumulation, and Saylor once told us we should sell our kidneys before we ever sell our Bitcoins.

MSTR’s stock plummeted 77% since its peak, and this week, it’s down about 18%. The fall also slammed related funds MSTU, MSTY, and MSTX, making them super volatile as investor faith in MSTR’s Bitcoin plans wavers.

Things look even worse when you compare MSTR to regular stocks. As MSTR suffered because of Bitcoin, the S&P 500 gained roughly 116% in the same time frame. This contrast added to the pressure on MSTR’s strategy for managing its cash.

When I wrote this, Bitcoin was at $61,351, while Ethereum has dropped below $1,800, Solana hit $69, and XRP hovered around $1.17. In just the past twenty-four hours, almost $1.63 billion in assets got liquidated. Mostly, long position bets (over $1.38 billion worth) got zapped.

ETF exits, Polymarket bets, and weaker big buyers add pressure to Bitcoin

U.S. spot Bitcoin ETFs saw $396.6 million in net outflows on June 3. That was the 13th straight trading session of negative flows, with the streak running since May 15. For a market that loves easy bullish stories, two full weeks of ETF exits is not exactly a cute look.

In Polymarket, traders had the “no” outcome for a bet on whether Strategy would sell Bitcoin by May 31. Then, Strategy revealed selling 32 BTC during that time, just a day late. This happened on June 1, with the contract holding about $80 million in volume.

Meanwhile, Bitcoin was losing strength while key stock indexes kept rising. The Nasdaq 100 (INDEXNASDAQ: NDX) hit a new peak on Tuesday, as the crypto market continued to fall. Over the past year, the Nasdaq 100 gained 41%, whereas Bitcoin dropped 38%. It’s currently 48% below its yearly high.

Glassnode data also shows that Bitcoin buyers have changed since May. During the rally earlier last month, wallets holding between 1,000 and 10,000 Bitcoin led the buying. That group is often linked with large investors and institutions.

So far in June, those same buyers have become less active. Smaller wallets and the largest whales have been more willing to buy during the downturn.

Public companies hold about 1.24 million Bitcoin in total. If more of them start selling, the market could face a messy unwind of the corporate treasury trade.

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