Bitcoin (BTC) fell into bear market territory after a sharp sell-off overnight, while Michael Saylor framed the decline as a temporary rotation of capital towards AI rather than a loss of confidence in the asset.
summary
- Bitcoin has fallen into bear market territory after falling 22.7% from its four-week high.
- Michael Saylor said funding AI infrastructure has caused capital to shift away from Bitcoin ETFs.
- The small Bitcoin sale of this strategy has raised concerns because the company has not sold Bitcoin since 2022.
Chief Strategy Officer Michael Saylor Capital markets have directed about $400 billion into AI infrastructure over the past six months, while spot bitcoin ETFs have recorded about $4 billion in outflows since May 14, he said Thursday on X. Saylor said the withdrawals have put pressure on Bitcoin, but called the move “a rotation of capital, not a weakness in Bitcoin.”
Bitcoin fell to a low of $61,400 overnight before paring part of the decline to trade near $62,400 in the pre-market hours on Thursday. The asset is down 7% over 24 hours and more than 14% over the past week. Based on the latest move, Bitcoin is now down 22.7% from its four-week high. The decline has also wiped out more than $600 billion from the total market cap of cryptocurrencies, according to figures cited in the market report.
Saylor links Bitcoin pressure to AI spending
Saylor’s explanation has categorized the sell-off as part of a larger capital move toward AI infrastructure. Wall Street consensus estimates put hyperscale capital expenditures at more than $600 billion for 2026, while CreditSights estimates about $450 billion of that will go to AI hardware, servers, and networking equipment.
According to Saylor, Bitcoin’s decline does not show damage to the asset’s investment case. Volatility creates opportunities, he said, while ETF outflows have added pressure during a period when institutions are funding AI-related projects at historic levels.
Meanwhile, the timing of his comments drew attention because Strategy recently sold a small portion of its Bitcoin holdings.
The strategy’s Bitcoin sales attract market attention
The strategy disclosed in a Form 8-K dated June 1 that it sold 32 bitcoins between May 26 and May 31 at an average price of $77,135 per coin. The company said the sale raised $2.5 million net of expenses and will help fund dividends on its stock STRC Preferred stock.
The sale was small compared to the strategy’s total holdings. The company remains the largest holder of bitcoin, with 843,706 bitcoins valued at about $61 billion based on numbers in the report.
However, analysts stated in the report that the deal affected market sentiment due to… strategy It has not sold Bitcoin since late 2022. Saylor’s public image as a consistent Bitcoin accumulator has become part of the company’s market identity, and selling gave bearish traders a new point of focus during the sell-off.
The balance sheet moves came before the decline
One week before the sale, Strategy had already changed its financial focus. The company repurchased $1.5 billion of its 0% convertible notes due 2029 for about $1.38 billion in cash.
According to the strategy, the deal reduced its debt obligations by approximately $120 million and reduced convertible debt from $8.2 billion to $6.7 billion. The company also announced a cash reserve of $871 million after the buyback.
At the time, Strategy owned 843,738 BTC and said it planned to rebuild its liquidity reserve through future capital raises. Bitcoin’s decline also affected Strategy’s shares. MSTR It fell nearly 15% over five trading days, according to market figures cited in the report. While Saylor argued that Bitcoin faces temporary pressure from AI-driven capital inflows, Strategy’s decision to sell even a small amount of Bitcoin complicated the market’s response.
