While bitcoin Michael Saylor, president of Strategy, a publicly traded firm, blamed the rise of artificial intelligence for last week’s bitcoin sell-off, cryptocurrency investment firm Arca is pointing the finger directly at Saylor himself.
“Last week’s selling pressure was clearly due to the Saylor/MSTR news,” Arca chief investment officer Jeff Dorman wrote in his weekly note, rejecting what he called “gaslighting from MSTR and other Bitcoin bulls.”
Bitcoin, the leading cryptocurrency by market value, fell almost 14% to $60,000 last week. The liquidation came after Strategy revealed on June 1 that it sold 32 BTC the previous week. The strategy still holds 845,256 BTC worth billions of dollars.
Saylor attributed the sharp drop to AI infrastructure spending absorbing capital on a historic scale.
“AI development is absorbing capital on a historic scale, creating temporary pressure on global markets. That does not weaken Bitcoin. It strengthens the case for scarce, liquid, digital capital. Bitcoin remains the leading long-term asset,” Saylor said.
Arca doesn’t believe it.
Dorman’s argument is simple. What tanked the market was not the amount of BTC sold, which was just 32, worth about $2.5 million, but the understanding of what that sale entailed: That strategy may need to sell significantly more bitcoin to meet cash dividend obligations on its preferred shares, including STRC.
In Arca’s opinion, Saylor has made a series of mistakes over the past three weeks. It used its only cash to pay off zero-coupon debt, then shook markets by sparking a $2.5 million bitcoin sale, barely enough to cover a month’s preferred dividends. The strategy currently has about five months of cash flow left, 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 an 8-K filing that Strategy has raised between $2 billion and $4 billion through the sale of MSTR shares and bitcoin, enough to cover preferred dividends through September 2028, Dorman believes markets would rebound sharply. That buffer would eliminate forced seller excess and give Bitcoin room to breathe.
But Dorman doesn’t think Saylor will.
“Saylor is basically addicted to buying Bitcoin,” he wrote, suggesting that the most likely outcome is continued drip selling, 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 push until there is blood,” Dorman wrote.
The bright spot
Last week’s BTC sell-off was initially limited to Bitcoin itself and did not immediately spread to the broader market, a positive point that points to growing 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, reaching lows below 58% for the first time since September.
He noted that earlier in the week, bitcoin fell on its own idiosyncratic news, while other crypto assets remained stable. This, he said, is a clear sign 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 go down on its own idiosyncratic bad news without bringing down the entire market, this would be another sign that digital asset market participants are becoming more sophisticated,” he added.
However, at the end of the week, the BTC sell-off became too intense and most assets joined the downtrend.
