Bitcoin hits two-month low at $67k after Strategy sale
The cryptocurrency was down 4.6% to $67,724.1, its weakest level since early April
Bitcoin on Tuesday slipped to a two-month low, extending recent losses after top corporate holder Strategy sold its holdings for the first time in nearly three-and-a-half years.
Crypto markets were also quashed by weak risk appetite in the face of heightened uncertainty over the Iran-U.S. war, amid increasingly mixed messaging on the state and extent of peace talks between the warring parties.
At 21:20 GMT, the cryptocurrency was down 4.6% to $67,724.1, its weakest level since early April.
Bitcoin is confirming a breakdown today below support from the daily cloud model in a short-term setback, suggesting its pullback may deepen in the near term, Fairlead Strategies’ Katie Stockton said.
Strategy on Monday disclosed it had sold 32 Bitcoin between May 26 and May 31 at an average net price of $77,135 a coin, to raise $2.5 million.
Shares of the firm slipped around 6% after the disclosure, given that the sale was Strategy’s first such move since late-2022, even though it represented a fraction of its overall holdings. The stock extended losses on Tuesday, dropping more than 9%.
The company holds 843,706 Bitcoin.
Saylor had largely telegraphed the sale, stating that the company would consider selling some of its holdings to meet its steep debt obligations. Strategy’s Bitcoin purchases were funded chiefly through debt and the issuance of preferred shares, with the company now facing interest payments and dividend obligations for the funding.
But Saylor had also assured investors that Strategy would buy back an even greater amount of Bitcoin. Still, the company’s sale sent a bearish signal to markets, especially given that it came during a time of already heightened selling pressure on Bitcoin from institutional investors.
Investors dumped over $3 billion in Bitcoin exchange-traded funds over the past three weeks, data from SoSoValue showed.
Strategy’s latest Bitcoin sale may signal the start of ether outperforming bitcoin, according to Geoffrey Kendrick, global head of digital assets research at Standard Chartered.
The amount sold was ridiculously small, but the market reaction was telling, said Kendrick.
I see yesterday as being the start of ETH outperformance v BTC, he said.
Kendrick pointed to the price action as a potential inflection point, projecting the ETH-BTC ratio would climb to 0.040 by year-end from around 0.028 at present. He said that outlook would hold even if Strategy moved quickly to repurchase bitcoin at a far larger scale than what it recently offloaded.
I think this will be the case even if (as is likely) MSTR this week buys a large multiple of the 32 BTC it sold last week, Kendrick said.