Strategy's Chairman Michael Saylor attributed the recent Bitcoin price drop to AI infrastructure spending. However, crypto investment firm Arca disputes this claim and points the finger at Saylor himself.
Last week, Bitcoin (BTC) fell nearly 14% to $60,000 after Strategy disclosed it sold 32 BTC worth around $2.5 million. Saylor stated that the AI boom is absorbing capital at a historic scale, but does not weaken Bitcoin's value. He claims that this actually strengthens the case for scarce digital assets like Bitcoin.
Arca's Chief Investment Officer Jeff Dorman disagrees and suggests that the real reason behind the market drop was the realization of Strategy's potential need to sell more BTC to meet cash dividend obligations on its preferred shares, including STRC. Dorman argues that Saylor has made a series of missteps over the past three weeks, using his only cash to pay off zero-coupon debt and then teasing a $2.5 million BTC sale.
The bullish scenario, according to Dorman, is that if Strategy raises $2-4 billion by selling MSTR stock and BTC, it would remove the forced-seller overhang and stabilize the market. However, he believes this is unlikely and predicts continued drip selling, which will keep steady pressure on the market.
One positive note from last week's events is that the selloff was initially confined to Bitcoin itself and did not immediately spill over into other markets. This could indicate growing market sophistication as investors begin to assess each digital asset on its individual risk profile rather than indiscriminately selling everything when the market leader weakens.