While Bitcoin The president of publicly traded company Strategy, Michael Saylor, blamed the AI boom on last week’s bitcoin selloff, with crypto investment firm Arca pointing the finger squarely at Saylor himself.
“Last week’s selling pressure was clearly driven by the Saylor/MSTR news,” Arca chief investment officer Jeff Dorman wrote in his weekly note, pushing back against what he called “the gaslighting of MSTR and other Bitcoin bulls.”
Bitcoin, the leading cryptocurrency by market value, fell nearly 14% to $60,000 last week. The sell-off occurred after Strategy revealed on June 1 that it had sold 32 BTC the previous week. Strategy still holds 845,256 BTC worth billions of dollars.
Saylor attributed the sharp decline to AI infrastructure spending that has absorbed capital on a historic scale.
“The development of AI is absorbing capital on a historic scale, creating temporary pressure on global markets. This does not weaken Bitcoin. It strengthens the case for scarce and liquid digital capital. Bitcoin remains the leading asset in the long term,” Saylor said.
Arca doesn’t buy it.
Dorman’s argument is simple. What sent the market tumbling was not the amount of BTC sold, which was just 32, worth about $2.5 million, but the realization of what that sale implied: This strategy may have to sell a lot more bitcoin to meet cash dividend obligations on its preferred shares, including STRC.
According to Arca, Saylor has made a series of missteps over the past three weeks. He used his only cash to pay off zero-coupon debt, then shook the markets by announcing a $2.5 million bitcoin sale, barely enough to cover a month’s worth of preferred dividends. The strategy currently has about five months of cash flow remaining, Dorman noted, leaving the market wondering what comes next.
The bullish scenario
Dorman says there is a scenario that could stabilize things quickly. If Saylor announces via the 8-K filing that Strategy has raised $2 billion to $4 billion by selling MSTR stock and bitcoin, enough to cover preferred dividends through September 2028, Dorman believes markets would recover strongly. This buffer would eliminate forced seller excess and give bitcoin room to breathe.
But Dorman doesn’t think Saylor will.
“Saylor is fundamentally addicted to buying Bitcoin,” he wrote, suggesting that the most likely outcome is continued drip selling, just enough each month to cover the dividend, which keeps constant pressure on the market.
“When the world’s largest buyer becomes a forced seller, the market will continue to squeeze until there is blood,” Dorman wrote.
The bright spot
Last week’s BTC selloff was initially limited to Bitcoin itself and did not immediately ripple through to the broader market, a positive that indicates increasing market sophistication, according to Dorman.
BTC’s dominance rate, or its share of the total crypto market, fell for the second week in a row, bottoming out below 58% for the first time since September.
He noted that earlier in the week, bitcoin fell due to its own idiosyncratic news, while other crypto assets remained stable. According to him, this clearly shows that investors are now evaluating each digital asset based on its individual risk profile rather than selling everything indiscriminately when the market leader weakens.
“If BTC can fall on its own bad news without bringing down the entire market, it would be yet another sign that digital asset market participants are becoming more sophisticated,” he added.
However, by the end of the week, the BTC sell-off became too intense and most assets joined the downtrend.
