Bitcoin dropped to a four-month low on June 4, adding to recent losses influenced by heavy ETF outflows and a sale by corporate holder Strategy. Recently, a shift in investor appetite away from cryptocurrencies into sectors such as stocks linked to artificial intelligence (AI).
Michael Saylor noted that while AI-related fundraising targeted roughly $400 billion over the past six months, the largest investment increase in the industry’s history, spot Bitcoin ETFs reported net outflows of approximately $4 billion on May 14. He also posted on X that the trend shows capital rotation rather than bearish sentiment in Bitcoin and recommended that market fluctuations develop opportunities.
Since June 1, Bitcoin has decreased and fell below 10 million yen for the first time in around three months. At present, the cryptocurrency is trading closely at $63,300, showing a decrease over 1.5% in the past 24-hours and 13.6% in the past week.
According to a CoinPost report, U.S. spot Bitcoin ETFs recorded net outflows for 13 straight trading session around May 14 and June 3, with total withdrawals of about $4.27 billion.
Meanwhile, Spot Bitcoin ETFs shows an outflow of over $483.76 million on June 1, $519.19 million on June 2, and $396.6 million on June 3, yielding total assets below $82.8 billion on June 3.
The decrease was triggered by the Securities and Exchange Commission filing showing the Strategy’s sale of 32 Bitcoin around May 26 and May 31. Additionally, the ambiguity on the future of the proposed U.S. Clarity bill has weighed on market sentiment.
The transition from bankrupt Mt. Gox, which transferred approximately 10,306 Bitcoin to a new wallet and later moved 116.4 Bitcoin to Bitstamp also added as bearish factors. The Crypto analyst VirtualNISHI recommended the transfer to resolve concerns on potential creditor repayments or further selling pressure.
Furthermore, the speculation on potential SpaceX IPO has influenced concerns that capital may be shifting from crypto into equities, adding further pressure on the market.
The current sentiment conditions have weighed heavily on Bitcoin, speeding up its decline. Equity markets such as AI and tech stocks have been surging the industry, while Bitcoin has diminished.
According to a Coin Market Cap report, the large capital inflows into the AI sector includes Alphabet’s $80 billion increase, a SpaceX launch, and projected IPOs from Anthropic and OpenAI, as part of a widen “AI capital rotation” away from crypto. Meanwhile, the outlooks of prolonged high U.S. interest rates and geopolitical tensions have limited demand for non-yielding assets similarly to Bitcoin. Market sentiment has also decreased, with the Crypto Fear and Greed Index dropping from the mid-20s to about 11, denoting extreme fear.
As outlined by Jeffrey Kendrick, Standard Chartered’s Global Head of Digital Asset Research, Bitcoin may be near a bottom, underscoring the resilience of spot Bitcoin ETF holdings and the probability of the substantial buybacks from strategic investors.
He also added that Strategy sold 704 Bitcoin for tax purposes but reacquired 810 Bitcoin after two days. Currently, he outlooks a much larger buyback, possible up to 3,200 Bitcoin, and signaled that confirmation of such a move would be an early caution that a market bottom is developing.
Conversely, the possibility of Strategy’s buybacks depends on conditions outlying the preferred STRC. The instrument issues new shares through and ATM when trading over its $100 par value, using the proceeds to purchase Bitcoin.
Currently, STRC is trading of about $95,640 or 4.36% below par, while the ATM status has been paused. Crypto investor The Wolf Of All Streets, who recently interviewed Saylor, noted that trading below par is generally for preferred shares and not a warn of dysfunction.
STRC is structured to shift its dividend rate monthly with the plan to keep its trading price near to the $100 par value. Although, this approach may lead to demand without ensuring that security steadily trades at face value.
The recent data shows a decline of roughly 5% is linked to investors demanding higher yields, reassessing risk, and reacting to widespread market conditions. It is outlined as common behavior for preferred shares rather than a caution of any designed issues.
