Bitcoin is down horrendous

The world’s largest cryptocurrency is having the type of week that makes you post a Notes app apology on your Instagram story. Bitcoin fell for its fifth straight day yesterday, deepening a slump that has wiped out more than $160 billion of the coin’s market value since Monday.

For context, bitcoin started the week at nearly $74,000—a far cry from its October record of more than $126,000. Yesterday, it traded near $61,000, a four-month low.

What just happened? Strategy, a company that reshaped its whole business around hoarding bitcoin, disclosed on Monday that it sold some holdings for the second time ever. Though the company offloaded only a sliver (32 of its 843,706 coins), the move still spooked others into selling, because Strategy is the world’s largest corporate bitcoin holder, and it has typically followed a “never sell” mantra.

Strategy’s sale may have set off this week’s tumble, but…

…it’s not the main reason for bitcoin’s troubles

Since mid-May, investors have pulled more than $4 billion from bitcoin ETFs, marking their longest-ever streak of outflows. That’s a big deal, because “ETF flows are the primary driver of BTC price appreciation,” a Citi analyst told CNBC.

Analysts say several factors are causing the coin’s price to suffer, even as Big Tech carries the traditional stock market to new heights. Those include uncertainty from the war in Iran and concerns that a landmark crypto-friendly bill may not pass this year.

Another narrative is emerging: Investors appear to be withdrawing from bitcoin and other digital assets to invest in AI holdings instead, according to Bloomberg. Strategy’s chairman argued as much yesterday: “This is a capital rotation, not a bitcoin impairment,” he posted on X.

**Looking ahead…**some analysts think bitcoin is nearing the end of its bear market phase, which it cycles through every four or so years.—ML