This article first appeared on GuruFocus.
Bitcoin’s (BTC-USD) latest selloff is starting to look less like a routine crypto pullback and more like a confidence test for one of the market’s biggest support stories. The token fell as much as 3.1% to $65,391 on Wednesday before recovering part of the decline, extending a weekly drop that has erased about $160 billion in market value. The pressure began after Strategy (NASDAQ:MSTR) sold about $2.5 million worth of Bitcoin, just 32 tokens from its 843,706-coin hoard valued at more than $60 billion. The sale was financially tiny, but psychologically loud, because it appeared to challenge chairman Michael Saylor’s long-running never sell stance at a time when Bitcoin has already been underperforming.
That weakness stands in sharp contrast to the latest move in technology shares. The Nasdaq 100 climbed to a fresh record on Tuesday and is up 42% over the past 12 months, while Bitcoin is down 37% and remains 48% below last year’s peak. For investors, the message could be simple: capital is possibly finding a stronger story in AI equities than in digital assets. Carney Mak of FXHB Asset Management said some capital has been rotating from Bitcoin and digital assets into AI equities, where the risk-reward profile currently appears more compelling. That shift is also showing up in corporate decisions, as K Wave Media abandoned plans to deploy roughly $500 million into Bitcoin and redirected most of the capital toward AI data centers, GPU infrastructure and related acquisitions, while Bitdeer liquidated its entire Bitcoin treasury to fund expansion into AI and high-performance computing.
The stress is now moving beyond Bitcoin’s price chart and into the structure around the trade. Investors have pulled nearly $4 billion from US-listed Bitcoin exchange-traded funds over the past 12 sessions, a record streak of consecutive outflows, while about $1.5 billion in bullish crypto perpetual futures positions were wiped out over the past 24 hours. Strategy shares are down 14% this week and more than 70% from their peak, raising concern that leveraged and income funds tied to the company, including MSTU, MSTY and MSTX, could face amplified volatility if investors begin questioning the sustainability of the accumulation strategy. For a market built partly on the belief that major holders would keep accumulating, even a tiny sale could carry an outsized message: Bitcoin’s support story is being tested just as AI equities keep attracting momentum.