A hawkish Federal Reserve is bolstering the U.S. dollar, bitcoin ETFs have seen persistent outflows, and Strategy, the largest publicly listed bitcoin holder, faces mounting pressure.
Strategy’s preferred stock, STRC, has plunged to record lows well below its $100 par value, complicating the company’s aggressive bitcoin accumulation strategy.
Arca CIO Jeff Dorman highlighted the precarious situation:”Either sell an enormous amount of BTC and MSTR to help bring $STRC back up near par, and at least buy yourself some time, or continue to watch every part of your cap structure melt because of the uncertainty you’ve created,” he said on X.
As of writing, BTC changed hands near $62,400, down 0.8% since midnight UTC hours, according to CoinDesk data. Prices hit highs near $67,000 early this week.
Bitcoin’s (BTC) valuation metrics continue to highlight a deep discount even as markets brace for a potentially hawkish Federal Reserve under new chair Kevin Warsh. Analysis from Bitwise Investments said BTC remains in a “deep value” zone after a valuation metric fell below 1.0, a level associated with long-term accumulation periods.
However, investor participation remains subdued, with CryptoQuant’s realized cap growth metric remaining in a bear phase since late October 2025. This points to a steady slowdown in fresh capital entering the BTC network.
At the same time, a growing list of key companies going public raises increased competition for liquidity across the investment market, so the focus shifts to whether BTC attracts new capital amid tighter liquidity conditions.
Deep-value or liquidity squeeze, which is most important?
The Federal Reserve kept interest rates unchanged at 3.5%-3.75% on Wednesday, a decision that largely matched Bitwise’s market expectations and avoided the hawkish surprise the market had feared.
While BTC dropped back below $64,000 on Thursday following the Fed’s interest rate announcement, Bitwise described its price as a “deep value” opportunity based on its Mayer Multiple, which compares price to its 200-day moving average. The firm noted the metric had remained below 1.0, a level that has historically aligned with accumulation periods.
Bitcoin’s Mayer multiple vs Nvidia. Source: Bitwise
Bitwise argued that Bitcoin’s valuation stood out compared with AI-linked equities like NVIDIA, which were trading at significant premiums to long-term trend levels. The firm also flagged a growing pipeline of major capital raises, including potential offerings tied to SpaceX, Anthropic, and OpenAI. Collectively, those deals could attract more than $200 billion in investor demand.
Large listings often coincide with strong investor appetite. They also absorb liquidity that might otherwise flow into equities and cryptocurrencies. Bitwise said that elevated rates continue to limit the availability of capital for speculative assets despite Bitcoin’s attractive valuation profile.
The subdued participation is also reflected in Bitcoin’s capital flow trends. CryptoQuant’s realized cap growth metric has remained in a bear-phase regime since Oct. 30, 2025, even as Bitcoin’s valuation indicators moved into historically attractive territory.
Bitcoin’s realized cap growth analysis. Source: CryptoQuant
Since entering the bear phase, the metric’s seven-day and 59-day moving averages have declined to 13.9 and 19.1 on June 17 from roughly 70 in Q4 2025. The slowdown suggests the pace of new capital entering the Bitcoin network has continued to weaken, highlighting investor caution.
Bitcoin researcher Axel Adler Jr. pointed to a separate concern following the Fed’s decision. While rates remained unchanged, the updated dot plot showed nine officials expecting at least one rate hike this year and six projecting two or more.
Bitcoin reacted negatively to the update, with selling volume expanded during the decline on Wednesday, marking the heaviest trading activity at the point of rejection at $66,200. For gold, an initial rebound above $4,300 faded, leaving the metal trading near $4,244 on Thursday.
The reaction aligns with Adler’s view that markets are pricing in a higher-for-longer rate path rather than a near-term policy easing.
Related: Capital B shareholders approve up to $120B in financing capacity for Bitcoin strategy
BTC traders split on the next move
Market data shows that BTC traders are interpreting the Fed’s outcome in different directions.
Market commentator Crypto Rover highlighted a newly opened $38.5 million Bitcoin short position using 30x leverage shortly after the FOMC meeting. The trader was reportedly sitting on roughly $750,000 in unrealized profit as Bitcoin moved lower.
Meanwhile, Bitcoin investor Jelle viewed the pullback below $64,000 from the weekly high of $67,255 as a routine retest of support. The analyst identified the $64,000 threshold as a key price point for buyers, adding,
“Hold here, and we likely see extended relief into $70k in the coming weeks. Big day ahead.”
BTC/USD, one-day analysis by Jelle. Source: X
Related: Bitcoin capitulation ‘twice as weak’ after spot liquidity turns supportive: Glassnode
Bitcoin has spent five straight months trading below what it costs to produce, squeezing miners and forcing some to sell, JPMorgan said in a note. The bank pegs the cost to mine one bitcoin at about $78,000, well above the roughly $62,500 the asset fetches now.
The strain is showing and about 20% of miners are now unprofitable, the bank said citing CoinShares data, and publicly traded miners sold more than 32,000 bitcoin in the first quarter to cover operating costs, more than they offloaded in all of 2025.
The network is adjusting on its own. When the price drops below cost, higher-cost miners power down, the hashrate, or total computing power securing the network, falls, and mining difficulty, the automatic setting for how hard it is to mine, resets lower.
That played out in early June, when difficulty dropped 10%, the second decline of that size this year.
Miners are also reacting faster than before. JPMorgan says the sensitivity of difficulty to price has climbed, with more operators sitting near breakeven and flipping machines on or off as prices move. The bank expects larger and more frequent adjustments for as long as bitcoin stays below its production cost.
The outlook is cautious, but JPMorgan flags one upside. The weak sentiment around the sector could itself prove a bullish contrarian signal, echoing the run of accumulation readings, from whale buying to falling exchange reserves, pointing the same way this month.
XRP gave back more of last week’s rally on Wednesday after sellers pushed the token through $1.15 support, a level traders had been watching since the recent move above $1.20.
The decline came on some of the session’s heaviest volume and followed another rejection below the descending trendline that has capped every recovery attempt for months.
News Background
• XRP remains caught between growing expectations for U.S. crypto legislation and a market that continues to prioritize technical levels over narrative.
• Traders are also watching the year-long symmetrical triangle that has compressed price action between support near $1.10 and resistance around $1.25.
Price Action Summary
• XRP fell from $1.1873 to $1.1465 during the 24-hour session, losing 3.4%.
• The sharpest selling arrived around 15:00 UTC when volume surged to 134.2 million XRP, roughly 170% above average, breaking support at $1.1550.
• Buyers emerged near $1.13 and helped lift XRP back toward $1.15 into the close, though the rebound failed to reclaim broken support.
Technical Analysis
• The key development was the loss of $1.15. That level had acted as support following last week’s breakout and now risks turning into resistance.
The US Commodity Futures Trading Commission has resolved its action against Celsius Network founder Alex Mashinsky, permanently banning him from trading in markets the commodities regulator oversees.
The CFTC said Thursday that a court consent order also bars Mashinsky from ever registering with the regulator and ends the enforcement action it first filed in 2023.
“Mashinsky and Celsius engaged in a scheme to defraud hundreds of thousands of customers by mispresenting the safety, profitability, and regulatory compliance of Celsius’ digital asset-based finance platform,” the regulator said.
The latest order means Mashinsky will never be able to trade US commodities, futures and derivatives. Earlier this year, the CFTC and the US Securities and Exchange Commission issued guidance saying they considered most major cryptocurrencies to be commodities.
Source: CFTC
The settlement also puts an end to the CFTC’s first case against a digital asset lending platform and marks the end of one of the last remaining regulatory actions pending against Mashinsky.
Mashinsky was sentenced to 12 years in prison in May 2025 after pleading guilty to securities and commodities fraud for misleading Celsius’ customers about the safety of the crypto lending platform, which collapsed during a major market drawdown in 2022.
The CFTC alleged that Celsius received about $20 billion in funds and made risky investments to meet the returns it promised.
Related: Onchain, in court: What happened in crypto legal news this week
Mashinsky has already been banned from ever working in crypto or finance after settling a Federal Trade Commission complaint in April that permanently barred him from working with any product or service that can be used to “deposit, exchange, invest, or withdraw assets.”
Mashinsky is still facing charges filed by the SEC in July 2023, accusing him of making an unregistered securities offering, misrepresenting Celsius’ business and safety and manipulating the price of its Celsius (CEL) token.
The SEC told a federal court in late May that it has “engaged in substantive settlement discussions” with Mashinsky, but no agreement had been reached, with the court granting the regulators’ request for another 60 days to continue discussions.
Mashinsky filed on May 26 to vacate his 12-year criminal sentence, claiming his lawyers were ineffective, that evidence was tainted by authorities’ misconduct and that FTX co-founder and convicted fraudster Sam Bankman-Fried was to blame for the manipulation of the CEL token.
A court on Saturday ordered prosecutors to respond to Mashinsky’s request by mid-August.
Magazine: Big Questions: Do we really only need 2–5 cryptocurrencies?
Cap Labs’ batch auction for its CAP governance token drew 1,002 bids and $16.4 million in commitments, clearing at $0.011 per token for a $106 million fully diluted valuation.
Cap Labs has closed its public CAP token auction with 1,002 unique bids, $16.4 million in total commitments, and a 5.5x oversubscription rate, the EigenLayer-backed stablecoin protocol announced Wednesday night.
The auction opened June 8 and drew a final clearing price of $0.011 across a total supply of 10 billion CAP tokens, yielding the $106 million FDV figure. Per Cap’s published tokenomics, the ICO allocation represents 5% of total supply, or 500 million tokens. At the clearing price, that tranche raised approximately $5.5 million.
Cap is a covered credit protocol that issues cUSD, a synthetic dollar backed by a basket of regulated stablecoins including USDC, PYUSD, BlackRock’s BUIDL, and Franklin Templeton’s BENJI. Users who stake cUSD receive stcUSD, a yield-bearing version that earns returns from Cap’s operator network.
The protocol separates yield generation from risk management through three participant groups. Operators, typically institutional trading firms and market makers, borrow from Cap’s reserve to deploy yield strategies. Restakers, who lock capital via EigenLayer or Symbiotic, underwrite those operators and face slashing if an operator defaults. cUSD and stcUSD holders sit above the risk stack, insulated from losses by the restaker layer.
In the event of an operator default, Cap runs a Dutch auction on the restaker’s slashed collateral to replenish the reserve. Idle reserve capital not borrowed by operators is deployed into Aave or Morpho to generate a base yield floor for stcUSD holders.
Backing and Traction
Cap raised $11 million in seed funding in April 2025 from Franklin Templeton, Susquehanna, Triton Capital, and market makers Flow Traders, Nomura’s Laser Digital, GSR, and IMC Trading.
In its Q1 2026 investor update, Cap reported originating a $100 million revolving credit facility to Susquehanna Crypto, which it described as the largest onchain credit facility of its kind. Borrower adoption rose 175% over the quarter, with total loans outstanding up more than 300%.
The team had initially planned the token auction for Q1 2026 but postponed as ETH fell more than 30% in the past year.
Cap’s cUSD is deployed on Ethereum mainnet and on MegaETH. The protocol has also integrated with Pendle and Morpho, allowing yield-bearing stcUSD positions to be traded as term instruments or used as collateral.
The total stablecoin market stands at approximately $270 billion in combined supply, with USDT at $185.9 billion and USDC at $74.6 billion, per DefiLlama. Ethena’s USDe, the largest yield-bearing stablecoin by circulation, holds $4.51 billion.
Token Structure
The CAP token gives holders governance rights over core protocol parameters: reserve asset composition, eligible operator collateral, liquidation thresholds, minting fees, borrower whitelisting, and maximum coverage limits. Per Cap’s tokenomics, 47.97% of supply goes to the ecosystem and community, with private investors and the project team each capped at 20%. The ICO tranche was 5%. Cliff-gated allocations for private investors, the team, and the Echo community sale begin unlocking 12 months post-TGE.
A 5.5x oversubscription means committed capital exceeded the available supply by more than five times. The $16.4 million in total commitments against the approximately $5.5 million raised implies the clearing mechanism returned the majority of committed capital to losing bidders. The batch-auction format, which clears all winning bids at a single price, concentrates genuine demand and avoids the gas-war dynamics of first-come-first-served sales.
HIVE Digital Technologies (HIVE) shares jumped 10% in pre-market trading on Thursday after the company announced a $220 million, three-year GPU cloud contract with Bell Canada and AI firm Cohere, as the company continues its transition away from pure-play bitcoin mining.
The deal will see HIVE’s BUZZ High Performance Computing unit deploy 2,304 Nvidia Grace Blackwell GPUs at Bell’s AI Fabric facility in Merritt, British Columbia, forming the dedicated compute layer for Cohere’s enterprise AI models serving Canadian government and corporate clients.
All infrastructure will remain on Canadian soil, supporting Ottawa’s broader push to reduce reliance on foreign-controlled AI technology.
The deployment is expected to go live from late 2026 to early 2027, adding roughly $70 million in annual recurring revenue (ARR). Combined with approximately $35 million of current realised ARR, HIVE’s contracted HPC revenue target now exceeds $100 million, a clear signal that its infrastructure pivot is gaining serious commercial momentum.
Ether’s (ETH) exchange and derivatives data turned weaker over the past month. Binance recorded net inflows of 57,700 ETH, while futures open interest fell to a year-low of $10.3 billion from $15 billion, and the ratio of leveraged positions retreated sharply from their early June highs.
The combination of rising exchange supply, muted new participation, and declining futures activity has led ETH analysts to forecast another wave of selling pressure below $1,700.
ETH inflows on Binance outpace new demand
Crypto analyst Pelin Ay noted that roughly 57,700 ETH flowed into Binance on a net basis over the past few days. Large inflows to the exchange often signal potential selling since Binance is one of the most liquid exchanges in the crypto market.
ETH exchange inflows, new depositors and fresh supply. Source: CryptoQuant
At the same time, the number of new ETH depositors is around 320 addresses, well below the levels seen during previous demand surges. The muted participation suggests limited new capital entering the market, leaving recent price stability dependent on existing holders.
The analyst noted that supply growth continues to offer a counterbalance. Daily ETH issuance stands near 2,791 ETH, a relatively low figure since Ethereum’s EIP-1559 upgrade in 2021.
For now, exchange flow data paints a cautious picture. Ay said elevated net inflows raise the risk of another selling wave if Ether approaches resistance levels during any relief rally.
Related: BitMine boosts ETH holdings closer to $10B as bear market accumulation continues
Can Ether price defend its weekly demand zone?
ETH derivatives data have also cooled sharply in recent weeks. Ether futures open interest fell to $10.3 billion on Thursday from $15 billion a month ago, a decline of roughly 31%. The reading marks the lowest aggregate open interest across exchanges since April 2025.
Ether estimated leverage ratio for all exchanges. Source: CryptoQuant
The number of leverage positions has also retreated at a similar pace. The estimated leverage ratio (ELR) dropped to 0.83 from an all-time high of 1.10 on June 2, marking its largest leverage unwind since October 2025, when the metric slid from 0.72 to 0.56.
Lower leverage often reduces the short-term volatility and speculative demand, but it also signals weaker conviction among traders.
Ether’s weekly chart is down 30% over the past 42 days and continues to trade near the demand zone of $1,700 and $1,400. The April 2025 low at $1,384 stands as the nearest external liquidity target if price weakness continues.
Below that level, the immediate area of interest is the demand zone from January 2023 between $1,289 and $1,071.
From a market standpoint, crypto trader Ardi said last week that some technical bottoming signals are emerging for the altcoin. ETH recently touched the lower band of a long-term acceptance range that previously coincided with macro lows.
The weekly relative strength index (RSI) sits near 31 after a daily RSI reading of 11 during the recent sell-off, its lowest level on record, which improves the chances of ETH bottoming in the current price range.
ETH/USD weekly analysis by Ardi. Source: X
Ardi added that ETH/BTC remains a key chart metric to monitor, as the pair continues to trend lower. For now, the $1,400 to $1,700 range remains the area where buyers and sellers are most actively positioned.
Related: Altcoin selling tops $266B as capital rotates out of crypto: Is altseason extinct?
There is now $15 billion sitting in three securities being marketed to bitcoin holders as the safer, smarter way to access bitcoin exposure: Strategy’s preferred stack, STRC, and SATA. The pitch is identical across all three. Tax-favored. 11.5% income. Backed by bitcoin. Money-market risk. 82.7% of the buyer base is retail. Every word of that pitch is wrong, and the security those buyers actually own is built to fail in exactly the bitcoin environment it claims to harness.
The Pitch Is a Story. The Capital Structure Is the Truth
STRC is an unsecured, subordinated, perpetual preferred equity. No maturity date. No lien on a single satoshi of Strategy’s bitcoin treasury. The dividend is discretionary, which means the board can cut it at any monthly meeting with no notice, no remedy, and no vote. S&P rates the issuer B-, four notches into junk territory. None of that information appears in the marketing.
Stack those features against the words in the pitch. “Backed by bitcoin” describes a security with no claim on a single coin. “Money-market-like” describes an instrument rated four notches below investment grade with no maturity and a discretionary coupon. “Safe income” describes a payment the board controls and the funding source for which is the security itself. Each phrase in the marketing is contradicted by the indenture.
That is not a money market fund. It is speculative-grade credit-like product dressed in safe-income marketing, and 82.7% of it sits on retail balance sheets. Of the $10.7 billion notional outstanding for STRC, roughly $8.8 billion belongs to retail bitcoin holders concentrated in a single junk credit. There is no polite phrase for that exposure. It is a bag, and retail is holding it.
The Funding Mechanism Eats Itself
The structural risk in STRC is not that the dividend is high. It is that the dividend cannot be funded out of the business. Strategy’s underlying software business produces roughly $477 million in annual revenue. Total preferred dividend obligations now exceed $1.2 billion, a ratio of 3.5 to 1. The gap is not closed by earnings. It is closed by issuing new STRC shares at or above par, or diluting common shareholders of MSTR, with the proceeds recycled to pay the existing holders.
That is a reflexive funding loop. It works when STRC trades above par and breaks the moment it doesn’t. Anything that pressures the price, a credit downgrade, a missed dividend, a bitcoin drawdown, a capital markets shutdown, removes the very mechanism the dividend depends on. There is no plan B in the indenture. There is no lien on bitcoin to seize. There is no operating cash flow to redirect. There is only the next share issuance, and the next, until either bitcoin compounds the company out of the problem or the structure jams.
Then there is the dividend ratchet. The coupon has moved monthly from 9% to 11.5%, embedding $268 million in permanent annual obligations into the structure. The rate has only ever moved in one direction. Each monthly increase makes the funding gap wider, the share issuance more dilutive, and the price floor harder to hold. The mechanism designed to keep STRC attractive to new buyers is the same mechanism that compounds the burden on the issuer and accelerates the run on the funding loop when stress arrives.
The Mythical Institutional Buyer and the Math That Buries Him
The standard defense of the Digital Credit category goes like this: surely informed institutional capital is on the other side. Insurance companies need yield. Pension funds need duration. Fixed-income desks need product. Digital Credit is the institutional bridge to bitcoin.
That defense collapses on its own logic. Any institution that allocates to an unsecured, subordinated, perpetual preferred layered on a bitcoin treasury must first underwrite the underlying asset. Any institution that does the work to underwrite bitcoin allocates directly to spot bitcoin, where the credit risk vanishes and the path-dependent fragility goes with it. The institutional buyer who is both informed and rational does not exist in this product. The buyer who does exist, at 82.7% concentration, is retail.
The path-dependency math finishes the argument. Across 5,000 simulated bitcoin paths at a 10% compounding rate, the credit model produces a 12.3% probability of formal default, a 21.9% probability of dividend deferral, and a 50.7% probability of at least one forced bitcoin sale by the issuer during the eight-year cycle. At a 15% compounding rate, STRC has a 44.6% probability of ending below $85 even on paths where bitcoin recovers to new highs.
A bitcoin holder’s terminal wealth depends only on where bitcoin ends. An STRC holder’s outcome depends on every drawdown in between, because the same mechanisms that pretend to protect the dividend in calm conditions become the mechanisms that consume the holder’s principal in stress. The product is most fragile in exactly the bitcoin scenarios the underlying asset absorbs without consequence.
Bitcoin Was Built to Kill This Exact Trade
Bitcoin’s entire reason for existing is the removal of counterparty risk, custody risk, and opacity from monetary holdings. STRC, Strategy’s preferred stack, and similar instruments reintroduce all three under a marketing layer the underlying instrument cannot support. The alternative does not require any of that machinery: bitcoin in self-custody alongside a U.S. Treasury income ladder produces the same cash profile, with more terminal wealth and no corporate issuer in between.
The market will eventually clear the difference between the security retail thinks it bought and the security it actually owns. Anyone reading the cap table and allocating anyway is willingly underwriting Saylor’s funding plan with capital that thinks it bought a money market fund.
This is a guest post by Glenn Cameron, Global Head of Onramp Institutional. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
Blockchain infrastructure firm Alchemy said AI agents with its AgentCard now have access to the Visa (V) network with complete identity and payment capabilities, enabling them to make online purchases on behalf of consumers.
The integration allows AgentCard, a virtual ID and spending card for AI agents, to access Visa Intelligent Commerce to book a vacation, order groceries or renew a subscription, for example, without the consumer ever touching a checkout screen.
Agent-native payment protocols are in early adoption with firms like Stripe, Visa and Mastercard (MA) driving hard into this new area, known as agentic commerce. AgentCard works with agents built on models from any provider, including OpenAI or Anthropic.
“Every major computing shift has produced a new kind of economic actor,” Nikil Viswanathan, co-founder and CEO of Alchemy, said in a statement. “The internet created online businesses. Mobile created the app economy. AI agents are next, and they need to be able to access the global economy, and AgentCard is how that starts.”
