MarketsJun 25, 2026
Bitcoin Selloff Deepens as Three Pillars of Demand Break at Once
Market Rotation
Rhea Lobo
Discover
Bitcoin is down more than 50% from its all-time high, and the buyers who once reliably stepped in are stepping back. Three separate pillars of demand, retail traders, institutional allocators, and Strategy, are all wobbling at the same time.
Bitcoin's drop below $60K is challenging one of its biggest bull cases. For the past two years, investors piled into the cryptocurrency on the belief that tariff-driven inflation, heavy government borrowing, and political pressure on the Federal Reserve would weaken the dollar and make Bitcoin an attractive hedge.
The dollar index is now at 13-month highs. New Fed Chair Kevin Warsh made price stability his top priority at his first policy meeting, signaling a hawkish posture that inverts the easing-cycle case for Bitcoin. When the risk-free rate rises, holding a non-yielding asset like Bitcoin becomes harder to justify against bonds or cash.
Spot Bitcoin ETFs have recorded six consecutive weeks of outflows totaling ~$6B, the largest two-month stretch of redemptions in two years. US-listed Bitcoin funds have added ~$3B of net outflows in June alone.
Strategy built its identity as Bitcoin's buyer of last resort, routinely issuing stock and preferred securities to fund purchases. That model is now under visible strain.
Shares have fallen more than 70% over the past six months and recently broke below $100 for the first time since 2024. Its preferred shares have also come under pressure, making it more expensive for the company to fund future Bitcoin purchases.
"The market is repricing the whole MSTR and STRC flywheel."
Shiliang Tang of Monarq Asset Management.
Strategy sold Bitcoin for the first time since 2022 last month, a move that rattled sentiment. Its current market value sits ~36% below the $51B carrying value of its Bitcoin holdings.
The derivatives market is not offering much comfort. About $10B in Bitcoin options expired Friday on Deribit, the largest crypto options venue. Most of those contracts were bullish bets placed when Bitcoin traded far higher.
The iShares Bitcoin Trust ETF saw put volume more than double calls Thursday, with $144M of the $187M in total premium flowing into puts.
Bitcoin miners are feeling the same pressure. MARA Holdings, Riot Platforms, Coinbase, and Robinhood Markets fell on the news.
The rotation story is straightforward. The PHLX semiconductor index has advanced 158% over the past year while Bitcoin has dropped ~43% over the same period. AI chip stocks are absorbing the capital that once chased crypto's debasement narrative.
Some of that reallocation is also structural. Analysts point to upcoming IPOs from Anthropic and OpenAI as destinations for capital that might otherwise support Bitcoin.
SpaceX is drawing attention too, with some suggesting investors are liquidating crypto to fund that allocation.
The collapse in MemeCore's token adds another layer of reputational damage to the broader crypto space. Blockchain investigators flagged manipulation concerns and called on exchanges to explain why the token was listed at all.
Bitcoin is now below its 200-week moving average, a technical level that has historically signaled prolonged bear markets. The more decisive test comes in the first full week of July, after quarterly books clear and leverage unwinds.
