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Bitcoin Slumps Toward $61,000 as Zcash Bug, ETF Outflows and Strategy Sale Deepen Crypto Rout

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Bitcoin Slumps Toward $61,000 as Zcash Bug, ETF Outflows and Strategy Sale Deepen Crypto Rout

Bitcoin fell toward $61,000 on Friday, extending a weekly slide of about 16% and leaving it roughly 50% below its October 2025 record near $126,000. At the time of writing, Bitcoin was trading around $62,109, with an intraday high of $64,380 and low of $61,407, according to CoinMarketCap data.

Bitcoin fell toward $61,000 on Friday, extending a weekly slide of about 16% and leaving it roughly 50% below its October 2025 record near $126,000. Image Credit: CoinMarketCap

The move capped one of the sharpest risk resets in crypto this year.

Crypto’s total market cap dropped to $2.14 trillion, as traders cut exposure across Bitcoin, Ether and smaller tokens. A mix of macro pressure, forced liquidations, ETF redemptions, and a fresh confidence shock from Zcash triggered this decline.

The privacy token ZEC plunged after Shielded Labs disclosed a critical flaw in Zcash’s Orchard shielded pool. The bug could theoretically have allowed undetectable counterfeit ZEC minting and had existed since Orchard’s activation in 2022, according to the disclosure.

The vulnerability has now been patched.

But the market reaction shows the harder problem: investors cannot easily prove whether the flaw was ever exploited. That uncertainty hit ZEC first, then spilled into broader altcoin risk, particularly assets where trust depends on complex cryptography and opaque supply verification.

ZEC fell more than 40% after the disclosure. Shielded Labs has proposed an upgrade that would allow verification of the privacy coin’s supply, an attempt to restore confidence after the incident.

Zcash (ZEC) plunged after disclosure of a critical Orchard pool bug that could have enabled unlimited counterfeit ZEC
Zcash (ZEC) plunged after disclosure of a critical Orchard pool bug that could have enabled unlimited counterfeit ZEC. Image Credit: CoinMarketCap

Bitcoin was not directly affected by the Zcash bug.

Still, in fragile markets, unrelated shocks often become liquidity events. Traders sell what they can, not only what caused the stress.

That dynamic was visible in derivatives markets.

Ryan Lee, Chief Analyst at Bitget Research, said the decline was driven by a broad risk-off move across global markets that triggered “the largest crypto liquidation event since January 2026,” with about $1.8 billion in leveraged positions wiped out over the past 24 hours.

“U.S. equities declined, oil remained elevated near $95-$97 per barrel due to geopolitical concerns, and investors continued to scale back expectations for near-term Federal Reserve easing,” Lee said. “The shift in sentiment pushed Bitcoin into the low $60,000 range and Ether toward $1,800.”

The scale of liquidations mattered more than the headline price move.

More than $1.5 billion of the liquidations came from long positions, according to Lee, showing how much bullish leverage had accumulated before the selloff. Open interest fell sharply, while funding rates turned negative as traders were forced out of crowded positions.

“The speed of the move suggests market structure was the primary driver of the selloff,” Lee said.

That makes this decline different from a simple spot-market retreat.

Macro conditions created the spark. Leverage supplied the fuel. Once Bitcoin broke lower, futures positions were closed automatically, deepening the move and pushing prices through levels that discretionary traders were watching.

“Macro conditions created the catalyst, but leverage amplified the decline,” Lee said. “Similar episodes over the past two years have occurred when crowded positioning met an external shock, creating rapid liquidations across futures markets.”

The external shock is not only crypto-specific.

Global markets are again trading around oil, inflation and geopolitical risk. Brent crude remained near $95 a barrel on Friday, while WTI traded above $92, as markets assessed Middle East tensions, Iran-related negotiations and supply disruption risks around the Strait of Hormuz.

Those pressures are feeding into the Federal Reserve debate.

Higher oil prices make inflation harder to bring down. That reduces the case for rapid rate cuts and raises the cost of holding long-duration, speculative assets. Bitcoin has increasingly behaved like a high-beta macro asset during periods of funding stress, even when some investors still describe it as an inflation hedge.

That explains the uncomfortable market signal.

Bitcoin can trade with gold when investors worry about currency debasement or inflation. It can also trade like technology stocks when liquidity tightens. In the latest selloff, the second impulse dominated.

ETF flows added another layer of pressure.

U.S. spot Bitcoin ETFs had seen 13 straight sessions of outflows totaling roughly $4.4 billion before recording a small $3.05 million inflow on Thursday, according to CoinDesk. Total Bitcoin ETF holdings were down about 7.2% from their October 2025 peak to 1.28 million BTC.

It’s crucial because ETFs have become one of Bitcoin’s key marginal buyers.

When ETF demand is strong, it can offset selling from miners, traders and early holders. When ETF demand weakens, Bitcoin becomes more dependent on spot buyers and corporate treasuries to absorb supply.

That is why Strategy’s Bitcoin sale unnerved the market.

Strategy, the largest corporate holder of Bitcoin, sold 32 BTC between May 26 and May 31 at an average price of $77,135, raising about $2.5 million net of expenses and fees. The company said it still held nearly 844,000 BTC, with an average purchase price of $75,699.

The sale was tiny compared with Strategy’s overall holdings. But symbolically, it sent negative messege in the matket.

Saylor had spent years positioning Strategy as a permanent Bitcoin accumulator. Even a small sale created questions over whether the company’s financing model, preferred dividends and debt-linked obligations could force more disposals if market conditions deteriorate.

The sale contributed to market anxiety, even though the amount sold was immaterial relative to Strategy’s balance sheet.

However, Standard Chartered’s Geoffrey Kendrick maintained a $100,000 year-end Bitcoin forecast despite the “painful” week.

So, did Strategy’s sale cause Bitcoin’s decline?

Not by itself.

It’d be better to say that it became a psychological accelerant. The market was already dealing with ETF outflows, macro stress, weak liquidity and a derivatives flush. Strategy’s sale challenged one of the market’s strongest narratives: that the largest corporate Bitcoin holder would never sell.

That was enough to worsen sentiment.

Saylor views the broader decline as a capital rotation toward artificial intelligence rather than a fundamental rejection of Bitcoin. The Wall Street Journal reported that he described the slump as investors redirecting funds toward AI opportunities.

That rotation is visible across markets.

Equities tied to artificial intelligence have continued to draw capital, while crypto has struggled to rebuild momentum after its 2025 peak. Bitcoin’s underperformance against major equity benchmarks this year has made the asset more vulnerable to redemptions from institutions that entered through ETFs.

The immediate technical focus is now $61,000.

A hold above that level could allow a short-term rebound toward $62,500 or $64,000, especially after the forced liquidation of crowded long positions. CoinDesk analysts described the recent rebound toward $64,000 as an oversold bounce rather than confirmation of a trend reversal.

A break below $61,000 would be more serious.

It would put the $60,000 area in focus and could open the path toward $55,000 if macro data disappoints, ETF outflows resume, or traders rebuild short exposure. Friday’s U.S. nonfarm payrolls report is therefore important because it will shape expectations for Fed policy.

A strong jobs report may reinforce the higher-for-longer rate narrative.

A weak report could cut two ways. It may support rate-cut expectations, which could help risk assets. But it could also deepen concerns about growth, encouraging investors to reduce exposure to volatile assets.

For now, Lee argues that the main signal is the leverage reset.

“The key signal is not the decline in asset prices but the scale of leverage removed from the system,” he said. “With speculative positioning reduced and open interest resetting, markets are likely to become increasingly driven by spot demand, ETF flows, and macroeconomic developments rather than derivatives-led momentum.”

That is the central question for Bitcoin after the crash.

If spot demand returns and ETF flows stabilize, the selloff may become another leverage-clearing event in a longer cycle. If institutional outflows persist and macro pressure intensifies, Bitcoin’s fall from its October peak could become a deeper repricing of the post-ETF bull market.

The above article “Bitcoin Slumps Toward $61,000 as Zcash Bug, ETF Outflows and Strategy Sale Deepen Crypto Rout” was first published on AlexaBlockchain. Read the complete article here: https://alexablockchain.com/bitcoin-slumps-toward-61000-zcash-bug-etf-outflows-strategy-sale-deepen-crypto-rout/

Read Also: Is India Moving From Crypto Uncertainty Toward a Clearer Policy Framework?

Disclaimer: The information provided on AlexaBlockchain is for informational purposes only and does not constitute financial advice. Read complete disclaimer here.

The Hyperinflation Of 1971 At The Kindergarten

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The Hyperinflation Of 1971 At The Kindergarten

I’m pretty sure it was 1971, but it could have been 1972. In any case, it was in kindergarten, and I was five years old. Our teachers had set up a system to motivate us kids to behave well. They had hung a big board on the wall, with all of our names listed. If you were particularly well-behaved, kind, helpful, or polite, they drew a black dot next to your name. Misbehave, and they gave you a red one. It was all about following the kindergarten rules, and the absolute transparency of it motivated most of us to try our best.

At some point, an extra prize was introduced for exceptionally good behavior: a small piece of fabric. From the group’s standpoint, that was worth much more than the top ranking in a row of black dots. And it was tangible. You could prove your elite status, even out in the sandbox.

Eventually, a trading system developed between us kids. For a scrap of fabric, you could get a bucket of sifted sand. For two, you could get a piece of candy. Suddenly, we could trade labor (sifting sand) for status symbols or sweets.

Then one day, a new teacher arrived. For whatever reason, she much more generously handed out those scraps of fabric. She simply changed the rules governing their distribution. All of a sudden, everyone had them, and you had to spend four for a piece of candy instead of two. Some of the kids started to complain. Their hard-earned scraps of fabric were now worth less, and they demanded more of them.

As you’d expect, the fabric scraps were given out more and more freely. Before long, anyone could take as many as they wanted. Eventually, they were lying around all over the place. They were worthless. No one wanted them anymore. You couldn’t trade them for anything. And so, at just five years old, I experienced genuine hyperinflation.

What does this have to do with Bitcoin?

In kindergarten, the rules were simply changed. The new teacher wanted to be nice, we kids whined, and suddenly more and more fabric scraps were handed out.

The rules of Bitcoin simply cannot be changed.

It’s a completely different story with our fiat currencies. They too have rules. The problem is that no one can ensure those rules are actually followed. Here is an example: the European Central Bank is not allowed to permanently finance governments through bond purchases, yet it does so anyway, brazenly and with no one doing—or even being able to do—anything about it. And who would intervene anyway?

Here’s another example. The Maastricht Treaty’s Stability and Growth Pact stipulated that the budget deficits of EU member states could not exceed 3% of their GDP, although permissible exceptions were built in. However, between 2000 and 2010, the Stability Criteria were repeatedly violated without sanctions—not only by Greece (11 times) but also by larger countries such as Italy (seven times), France (six times), and Germany (five times). According to the Maastricht Treaty, there are clear sanctions for countries that unlawfully fail to adhere to the deficit limit. But not once has such a sanction been imposed. No attempt was ever even made.

This may have been politically expedient and justified for whatever reason, but it shows how difficult it is for us to adhere to the rules. It’s like the New Year’s resolutions that we make with the greatest of convictions, but then usually don’t stick to for very long. The result is what matters. Currencies inflate and, sooner or later, become worthless. The U.S. dollar has lost 97% of its value over the last hundred years. The British pound, which originally represented a pound of silver, has suffered the same fate. All because more and more new dollars, euros, or pounds have been created, or to put it differently, printed.

The outcome is the same: when the fabric scraps become worthless, everyone who holds them loses their wealth.

This cannot happen with Bitcoin. Its rules are fixed, and no one controls the system nor can they simply change those rules.

Discover more in Bitcoin: The Honest Money!
This excerpt is just the beginning. Dive deeper into how inflation devalues your money, your savings, and your time in Bitcoin: The Honest Money by Alex von Frankenberg, Ph.D. The paperback is available now.

Order your copy here!

House GOP Moves to Limit Lawmakers’ Prediction Market Betting

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House GOP Moves to Limit Lawmakers’ Prediction Market Betting

Republicans in the US House of Representatives are moving to add prediction market restrictions to a stalled congressional stock trading ban, as lawmakers scrutinize whether members of Congress should be allowed to wager on elections or public policy.

House Administration Committee Chair Bryan Steil plans to attach prediction market provisions to H.R. 7008, the House’s stalled stock trading ban bill, before it reaches the floor, Bloomberg Government reported Thursday.

Steil said he expects House leaders to schedule a vote on the measure, which would combine stock trading limits with new restrictions on lawmakers’ use of prediction markets.

The push comes amid growing scrutiny of prediction markets and renewed efforts to tighten rules on lawmakers’ financial trading.

No full ban on lawmakers’ prediction market use in Steil proposal

Steil’s proposal does not seek to ban prediction markets outright for members of Congress, but would restrict certain types of contracts lawmakers could trade. He said bets tied to sports or entertainment outcomes, such as the Super Bowl, would remain allowed, while contracts tied to elections or public policy would be limited.

Steil said the House still lacks clear rules for how members should engage with prediction markets.

“I don’t think this is a critique of the underlying product one way or the other,” Steil said.

Related: Polymarket users cry foul after Strategy sale market resolves to ‘no’

Politico says influencers promoted Polymarket after payments

According to a Friday report by Politico, influencers promoted Polymarket after receiving payments linked to the company’s chief marketing officer.

PayPal transaction records reviewed by Politico show at least $350,000 in payments routed through a personal account tied to CMO Matthew Modabber, alongside a broader flow of more than $2.5 million to hundreds of recipients over 14 months.

At least 20 creators later posted about Polymarket on X, often without disclosing financial ties, including figures such as Brian Krassenstein and Riley Gaines.

Cointelegraph reached out to Polymarket for comment on the promotions but had not received a response by publication.

Source: Brian Krassenstein

Polymarket attracted attention in 2024 after users successfully bet on Donald Trump’s election victory, reinforcing claims that prediction markets can reflect political outcomes in real time.

Prediction markets have also faced regulatory pushback in multiple jurisdictions over election-related contracts, gambling concerns and alleged insider-style trading.

Magazine: Should users be allowed to bet on war and death in prediction markets?

Sky Launches Fixed-Rate Yield Product Built on Pendle, Targeting $6B sUSDS Pool

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Sky Launches Fixed-Rate Yield Product Built on Pendle, Targeting $6B sUSDS Pool

Sky (formerly MakerDAO) launched Fixed Yield on Wednesday — a term-based alternative to the variable Sky Savings Rate built on Pendle Protocol v2, giving sUSDS depositors a locked rate to a named maturity date.

Sky (formerly MakerDAO), the protocol behind the $11 billion USDS stablecoin, launched a fixed-yield product Wednesday that lets depositors lock in a set return to a named maturity date using Pendle’s yield-tokenization infrastructure. The product, called Fixed Yield, is now live at sky.money/fixed-yield, Sky said on X.

The launch targets users of sUSDS, Sky’s savings-rate token, which holds $6.16 billion in market capitalization, by offering a term-based alternative to the variable Sky Savings Rate (SSR). At the time of writing, th fixed-yield market shows a 5.38% APY with a Nov. 26 maturity date, per the sky.money product page. The SSR’s own variable rate sits at 3.60% APY for the same sUSDS pool on DefiLlama.

The product is built on Pendle Protocol v2, which splits yield-bearing tokens into Principal Tokens and Yield Tokens. When a user supplies USDS, USDC, or sUSDS into a Fixed Yield market, the protocol issues PT-sUSDS — a Pendle principal token that matures on a date chosen by Sky. Holding to maturity locks the entry rate. Exiting early means selling the PT position at prevailing market prices, which may be above or below the entry price.

Sky’s Role and Pendle’s Infrastructure

Sky sets the maturity dates when it opens each market. The rate itself is market-driven, set by trading activity in the Pendle pool rather than by Sky’s governance. Sky makes clear on its product page that it does not set, control, or guarantee the rate.

Sky (sky-lending) holds $5.91 billion in total value locked, per DefiLlama, making it one of DeFi’s largest CDP protocols. Pendle, the fixed-yield infrastructure layer, holds $1.23 billion in TVL across Ethereum, Arbitrum and Plasma.

The launch follows Wednesday’s Pendle listing on Revolut, the European fintech with roughly 20 million crypto users, which expanded token distribution but not Pendle’s actual fixed-yield product access. This integration goes the other direction: it brings Pendle’s PT mechanics onto Sky’s own product surface, inside the protocol rather than on a trading app.

The SSR has drifted lower over recent months. A fixed product offering a premium above spot gives rate-sensitive depositors a reason to commit capital to a term rather than stay floating.

bitcoin below $62,000 ahead of jobs data as Zcash bug rocks crypto

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bitcoin below $62,000 ahead of jobs data as Zcash bug rocks crypto

Earlier, Shielded Labs, a nonprofit developer on the privacy token system, disclosed a critical vulnerability in Zcash’s (ZEC) Orchard privacy pool that could have threatened the integrity of the token’s supply.

The vulnerability, if exploited, could have allowed an attacker to create an unlimited number of counterfeit ZEC tokens, completely undetected.

“Think of it as someone secretly gaining access to the Federal Reserve’s dollar printing press, except in this case, even the Fed wouldn’t be able to tell these extra dollars were printed,” wrote Omkar Godbole.

Importantly, the vulnerability was discovered with help from Anthropic’s recently released Opus 4.8 AI model, raising difficult questions for the entire crypto industry. More to come on that.

ZEC is now down 42% over the past 24 hours.

Coinbase Launches Pre-IPO Perpetual Futures, Starting with SpaceX

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Coinbase Launches Pre-IPO Perpetual Futures, Starting with SpaceX

Coinbase International Exchange, operating through its BMA-licensed Bermuda entity, now offers USDC-settled perpetual futures on private-company valuations, with SpaceX as the first listing.

Coinbase has launched pre-IPO perpetual futures on its International Exchange, listing SpaceX as the first underlying asset.

The contracts are USDC-settled, trade 24/7 with no expiry, and are open to eligible users outside the United States, the company said in a blog post published June 3.

The product runs through Coinbase Bermuda Ltd., a Class F entity licensed by the Bermuda Monetary Authority. Maximum leverage is 5x. All profit and loss settles in USDC.

Valuation-Based Index Pricing

The SpaceX contract does not track a share price. It references a valuation-based index: a contract price of 1,735 implies a $1.735 trillion equity valuation. Coinbase uses this structure because a private company’s total share count is not disclosed until the final 424B4 IPO prospectus is filed, making per-share pricing unreliable before listing, per its help documentation.

When SpaceX files its 424B4, Coinbase will rebase the contract into a standard per-share stock perp via a P&L-neutral adjustment. Open positions carry through the transition without rollover.

The Competitive Field

Coinbase is not the first to list a SpaceX perp. Trade.xyz launched a synthetic SpaceX pre-IPO perpetual on Hyperliquid in May, with an implied valuation near $1.78 trillion. BitMEX announced a USDT-margined SpaceX perp (SPCXUSDT) on June 4, set to go live at 04:00 UTC on June 5, also with 5x leverage.

What separates the Coinbase product is its regulatory wrapper and conversion mechanics. Coinbase Bermuda holds a BMA Class F licence and commits to an automated IPO conversion backed by a published index methodology. BitMEX’s listing notes that conversion to a standard equity perp is at the exchange’s discretion.

Pre-IPO Markets Get a Derivatives Layer

The launch fits a wider push to apply market-structure tools to private-company valuations. Last month, Polymarket partnered with Nasdaq Private Market to launch prediction markets on private-company valuations, with early markets on OpenAI, Anthropic, and Stripe. Coinbase’s perp offers a different instrument — continuous leveraged exposure rather than discrete event outcomes — but targets the same structural gap: price discovery on companies not yet on public markets.

Brian Armstrong, Coinbase’s chief executive, said on X that pre-IPO perps are “great to get exposure to private companies before they go public (outside the U.S. only for now) and to help with price discovery.”

Coinbase has separately committed to launching perpetual-style equity index futures on its US-regulated Derivatives Exchange on June 14 — a different product aimed at US users trading market-sector exposure, not individual pre-IPO names.

Arthur Hayes dumps zcash holdings after Orchard Pool vulnerability revealed

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Arthur Hayes dumps zcash holdings after Orchard Pool vulnerability revealed

Arthur Hayes, chief investment officer of Maelstromfund, said he liquidated his entire zcash (ZEC) position after a developer disclosed a potential critical vulnerability in the network’s Orchard Pool.

Hayes, who previously championed the privacy token, said on X that while he believed it was extremely unlikely that any minting would take place, it could not be cryptographically proven impossible.

The now-plugged vulnerability was disclosed by Shielded Labs, which said a major issue went undetected for four years and could have allowed a hacker to print unlimited counterfeit tokens, damaging trust in the crypto’s supply and its value. The token slumped following the announcement and was recently down 42% over 24 hours.

“I read about the exploit yesterday, and didn’t appreciate how it violated my narrative mental map,” said Hayes. “The 30% dump made me rethink, and I had to take profit on the entire position.”

The vulnerability, present since 2022, was discovered on May 29 and fixed June 1, Shielded Labs said.

Hayes, who also co-founded the BitMex exchange, said he would reevaluate his stance moving forward and that, if his assumptions were proven incorrect, he would buy ZEC again “hopefully at lower prices.”

Blockchain analytics and intelligence firm Arkham wrote on X that one large investor lost over half the value of his $174 million ZEC stash.

“He hasn’t sold ZEC for 6 months. Ouch,” said Arkham.

Crypto’s worst week since July 2024 deepens as BTC, ETH prices near critical support levels

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Crypto’s worst week since July 2024 deepens as BTC, ETH prices near critical support levels

The crypto market is teetering on the brink of a major breakdown in price after suffering one of its worst weeks since July 2024.

Bitcoin BTC$61,875.23, currently trading around $62,500 has lost more 14.5% since midnight UTC on Monday morning, while ether (ETH) has plunged by more than 17%, dropping 5.5% on Friday alone.

Ether, the second-largest cryptocurrency, is now at its lowest level since April 2025, when it bounced at $1,420 before rallying to record highs over the subsequent four months. A break below that level would bring it toward 2022 bear-market levels, when it dipped below $900.

The broader altcoin market also suffered deep losses this week. One of the worst performers on Friday was zcash (ZEC), which tumbled by more than 30% after a security researcher found an exploit that would have minted “unlimited” tokens in its shielded pool.

There are multiple catalysts causing this week’s slide. Strategy (MSTR) Executive Chairman Michael Saylor attributed it to capital rotation in light of a series of artificial intelligence IPOs in the U.S., while onchain analysts are pointing towards a lack of spot crypto volume.

CryptoQuant notes that spot trading volume fell to $679 billion in April, the lowest monthly level since October 2023, indicating a lack of demand.

Derivatives positioning

  • BTC derivatives positioning has flipped from mild improvement to clear deleveraging this week. Open interest dropped 15% to $17 billion, with funding rates flipping negative to flat across multiple venues
  • At Deribit, the rate dropped to -15% annualized, a notable reversal from the prior positive regime. The three-month annualized basis fell to 2.7% from 2.9% last week, confirming a pullback in institutional risk appetite.
  • Options positioning has turned clearly defensive: Put/call volume has flipped to a 50/50 split over the past 24 hours, losing the prior call tilt, while the one-week 25-delta skew more than doubled to 27% from 13% a week ago. That signals a sharp escalation in demand for downside protection.
  • Front-end implied volatility (DVOL) has climbed further to 47, confirming a sustained bid that aligns with the broader deleveraging in derivatives.
  • Coinglass data shows $1.2 billion in 24-hour liquidations, with a 76-24 split between longs and shorts. Bitcoin ($364 million), ether ($291 million) and zcash ($107 million) were the leaders in terms of notional liquidations.
  • The Binance liquidation heatmap indicates $60,900 as a core BTC liquidation level to monitor, in case of a price drop.

Token talk

  • Zcash’s (ZEC) plight on Friday sowed seeds of doubt across privacy coins, with monero (XMR) losing 12% since midnight UTC and dash (DASH) dropping 9%.
  • ZEC’s losses were compounded by BitMEX founder Arthur Hayes, who said on X that his firm had sold its entire allocation of the token.
  • There were also heavy losses for ADA$0.1613, which tumbled by more than 10% after the project’s founder, Charles Hoskinson, said that he was “taking a break” after warning of ecosystem failures.
  • AI tokens lost their early week momentum as FET, NEAR and TAO fell 4%-6% despite outperforming the rest of the market on Monday.
  • One reason for altcoin holders to be hopeful is the fact that the average relative strength index (RSI) across all crypto pairs is in “oversold” territory, suggesting that a relief bounce could be on the cards this weekend.

Strategy’s Bitcoin Sale Raises Solvency Concerns As Bitcoin Crashes

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Strategy’s Bitcoin Sale Raises Solvency Concerns As Bitcoin Crashes

Key takeaways:

  • Strategy faces tighter short-term liquidity, but its conservative 11% net leverage protects it from forced BTC liquidations.
  • A Bitcoin rally above $70,000 remains unlikely as long as STRC trades under $100 and spot ETFs show net selling pressure.

Bitcoin (BTC) faced a 21% price correction in 10 days, retesting the $61,000 level for the first time in four months. This movement coincided with Strategy (MSTR US) company’s decision to buy back some corporate debt, temporarily pausing its Bitcoin accumulation. Traders now fear that Strategy could be forced to liquidate some of its Bitcoin holdings.

Strategy (MSTR US) Bitcoin reserve changes and average price. Source: Strategy

Strategy had been the largest known Bitcoin buyer, accumulating 126,016 BTC for $9.31 billion since March. However, the company used $1.38 billion of cash raised by recent equity issuances to buy back some of its convertible debt. The decision, announced on May 15, coincided with the Stretch preferred stock (STRC US) distancing itself from $100.

Strategy Series A Perpetual Stretch preferred stock (STRC US). Source: TradingView

The STRC preferred stock allows Strategy to issue new shares whenever its price reaches $100 and offers holders a variable dividend, currently set at 11.5% annually, paid monthly in cash. If traders decide it is no longer worth $100, new buyers step in at lower levels, which is equivalent to demanding a higher dividend. So, at first sight, this should be a non-event for Strategy’s risk perception.

Strategy raised $7.5 billion through preferred stock issuances in the first five months of 2026, which was highly supportive of Bitcoin’s price. Now, the company faces a rough path, given its cash position has been reduced to $900 million, which is enough to cover dividends for six months.

Strategy (MSTR US) financial highlights. Source: Strategy

Strategy’s 11% net leverage is the key financial metric to monitor, as it represents the amount of debt the company holds relative to its assets. By any standard, the coverage provided by its Bitcoin holdings — even at a $30,000 price — should be considered conservative.

Will Strategy be forced to liquidate some of its Bitcoin holdings?

While short-term liquidity conditions have certainly deteriorated, there is no contractual floor set in Strategy’s convertible debt that would force a Bitcoin reserve liquidation. Moreover, there is no prohibition on selling MSTR stock at a discount to its market-adjusted net asset value.

If debt markets are not available, the company could opt to dilute current MSTR holders. Whether this move would be interpreted as a weakness and further pressure MSTR and STRC prices is irrelevant to Strategy’s leverage ratio, as the company would remain financially solid.

Related: Saylor downplays Bitcoin slide as Strategy faces $11B paper loss

Source: X/zeroxkyle

According to X user zeroxkyle, author of the Grand Line newsletter, an eventual Bitcoin sale from Strategy would only bring its price down faster, worsening liquidity conditions. The analysis refers to a “doom loop” causing buyers to withhold from adding positions due to a constant fear of a large seller entering the market.

It is impossible to predict what would ease investors’ tension, as Strategy is in no danger of an imminent forced sale. The preferred stock dividends can be paused at will, although they merely accumulate for later on. Still, as long as STRC continues to trade below $100 and spot exchange-traded funds (ETFs) remain a net seller, odds for a Bitcoin rally above $70,000 are slim.

BitMine Files for $300M Preferred Stock Offering at 9.5% Yield to Expand ETH Treasury

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BitMine Files for $300M Preferred Stock Offering at 9.5% Yield to Expand ETH Treasury

BitMine Immersion Technologies filed a 424B5 prospectus supplement to raise up to $300 million through Series A Perpetual Preferred Stock at a 9.5% cumulative dividend — applying Strategy’s STRC capital-markets playbook to a corporate Ethereum treasury sitting on $9.2 billion in unrealized losses.

BitMine Immersion Technologies (NYSE: BMNR) filed a preliminary prospectus with the SEC on Wednesday to raise up to $300 million through a new class of preferred stock carrying a 9.5% cumulative annual dividend paid weekly in cash.

The structure mirrors the preferred-dividend instrument Strategy pioneered for Bitcoin, applied this time to a corporate Ethereum treasury that now holds 4.5% of the coin’s circulating supply.

The prospectus supplement, filed June 3 under accession number 0001493152-26-027136 on the SEC’s EDGAR system, covers up to 3 million shares of Series A Perpetual Preferred Stock at a $100 stated value per share. The shares are expected to list on the New York Stock Exchange under the ticker BMNP within 30 days of first issuance. Moelis & Company and Cantor are joint lead bookrunners.

The BMNP Instrument

The preferred stock is non-convertible. It does not give holders equity in the company. The 9.5% annual dividend obligation accrues on a $100 face value and compounds if unpaid. Dividends carry a default penalty of the regular rate plus 5 basis points per week, capped at 15%.

BitMine can call the shares at 110% of stated value in the first 18 months, at 105% between 18 months and three years, and at par thereafter. Holders receive repurchase rights if certain fundamental corporate changes occur.

Strategy’s comparable instrument, STRC, carries an 11.5% annual dividend and has raised roughly $10.5 billion since its July 2025 IPO. Strive and Metaplanet have issued similar structures. BitMine, led by Fundstrat co-founder Tom Lee, is now applying the same capital-markets template to the Ethereum side of the corporate-treasury trade.

BitMine’s ETH Holdings and the Paper-Loss Figure

BitMine holds 5,416,901 ETH, the largest corporate Ethereum position tracked by CoinGecko. At the current price of roughly $1,773, those tokens are worth approximately $9.6 billion, accounting for about 4.5% of Ethereum’s circulating supply of 120.7 million coins.

The company’s total invested cost in ETH stands at $18.83 billion, per the prospectus. That puts the unrealized loss at approximately $9.2 billion, according to the prospectus. ETH hit an all-time high of $4,946 in August 2025 and has since declined about 64%.

BitMine’s treasury also includes 203 BTC, a $200 million stake in Beast Industries, a $97 million stake in Eightco Holdings (Nasdaq: ORBS), and $446 million in cash, bringing total treasury assets to roughly $12.3 billion as of May 26, per the company’s June 2 investor presentation filed as an 8-K.

MAVAN Yield vs. Dividend Obligation

A 9.5% annual dividend on $300 million equals roughly $28.5 million per year. BitMine says it intends to fund that obligation primarily through staking yields from its MAVAN validator platform, which manages the bulk of its ETH holdings.

The prospectus does not specify MAVAN’s current yield rate. Ethereum staking yields on the network currently run below the 9.5% BMNP dividend rate, which means BitMine may need price appreciation or additional staking scale to fully cover the obligation without drawing on cash reserves.

That gap between actual staking yield and the committed dividend is the key structural tension the BMNP offering presents to prospective investors.

Schiff’s Critique

Peter Schiff, the gold advocate and longtime crypto critic, argued on X that raising capital at a 9.5% yield obligation to purchase more Ethereum is unlikely to succeed given the asset’s steep price decline.

Schiff has applied a similar critique to Strategy’s STRC instrument, warning of a potential death-spiral dynamic in which declining asset prices force issuers to offer progressively higher yields to attract investors, compounding the cost burden on an already loss-heavy treasury.

BMNR Common Stock and the Capital-Structure Logic

BMNR common stock has fallen roughly 50% from recent highs. That makes equity-based capital raises expensive in dilution terms. The preferred structure addresses that: BitMine takes in dollar-denominated capital at a fixed yield rate, without issuing common shares.

Strategy’s STRC program demonstrated how this structure can generate capital at scale even against a volatile underlying asset — it raised $10.5 billion over roughly 10 months. Whether the same logic holds for Ethereum, which carries different staking-yield economics, a deeper recent price decline, and a $9.2 billion hole in invested cost, is the question the BMNP offering puts to the market.

The prospectus does not specify a closing date for the offering.

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