Bitcoin fell below the key $60,000 level on Wednesday and dropped to around $59,000, its lowest price since October 2024. The sharp fall has raised concerns across the crypto market, as many investors worry that one of Bitcoin’s biggest supporters may be facing financial pressure.
Bitcoin price falls
One of the biggest worries for investors is Strategy Inc., the company led by Michael Saylor. The company owns hundreds of thousands of Bitcoins and has been one of the largest Bitcoin buyers in the world. Investors are now wondering if Strategy can keep raising money and buying Bitcoin as aggressively as it did before. According to a Bloomberg report, analysts believe the market is taking a fresh look at Strategy’s funding strategy and whether it can continue helping support demand for Bitcoin.
At the same time, the crypto market has seen heavy losses. Data from CoinGlass shows that about $800 million worth of crypto positions that were betting on higher prices were wiped out in the last 24 hours as prices fell. The market decline is also happening just before around $10 billion worth of Bitcoin options contracts are due to expire on Friday, according to data from Deribit cited by Bloomberg. Bitcoin fell by as much as 5.4% during trading and dropped to around $59,023 before recovering a little later in the day.
Strategy under pressure
Bitcoin last fell below $60,000 in early June, so traders see this price level as very important for market confidence. Strategy’s stock has now dropped for six trading days in a row and has reached its lowest level since February 2024. The yield on Strategy’s preferred shares has risen to about 14%, showing that investors want higher returns because they see more risk.
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During earlier crypto market crashes, many small investors bought Bitcoin when prices fell, which helped support the market. This time, however, many retail investors seem more interested in investing in artificial intelligence (AI) stocks instead of cryptocurrencies. Bitcoin ETFs had helped create strong demand before, but many people who bought Bitcoin at higher prices are now facing losses. Because of these losses, they may be less willing to buy more Bitcoin while prices continue to fall.
Bitcoin demand weakens
Instead of behaving like portfolio protection, Bitcoin has often traded like a high-risk asset that rises and falls sharply. Another concern is that Strategy is holding billions of dollars in unrealized losses after Bitcoin’s prolonged decline. Those losses have increased questions about whether the company can continue funding Bitcoin purchases at the level investors have become used to.
The crypto market has become unusually sensitive to any news involving Strategy because of its huge influence on Bitcoin demand. Although Strategy recently resumed Bitcoin purchases, concerns about its overall financing structure have continued to grow. The company’s preferred security, known as STRC, fell as low as about $79.85 on Wednesday, extending a sharp decline that investors are closely watching. Many traders see the fall in STRC as a test of confidence in Strategy’s long-term Bitcoin buying strategy, according to Bloomberg.
Crypto market concerns grow
Investors worry that if confidence in Strategy’s securities continues to weaken, the company may not be able to remain crypto’s largest buyer in the future, as stated by Bloomberg. CoinDesk reported that Bitcoin was down about 5% at roughly $59,300 later in the day, while Ether fell nearly 6% to around $1,555.
Earlier in U.S. trading, Bitcoin was already down more than 3% over 24 hours and struggling to stay above $60,000, according to CoinDesk. Other major cryptocurrencies including Ether, Solana and XRP also recorded similar losses during the session. While crypto prices were falling, investors were buying stocks again, especially companies linked to artificial intelligence.
The Nasdaq stock index was trading higher even as crypto markets remained under pressure. CoinDesk reported that Strategy’s stock had fallen more than 75% over the past year and was trading near a 2.5-year low.
Overall, investors are worried about two things at the same time: weaker retail interest in crypto and growing doubts about Strategy’s ability to keep buying Bitcoin, which has added to the pressure pushing Bitcoin below $60,000, according to Bloomberg and CoinDesk.
