TLDR
- Bitcoin fell nearly 14% to $60,000 last week, hitting a 2026 low of $60,800
- Strategy sold just 32 BTC for $2.5 million — its first sale since 2022 — to cover preferred stock dividends
- Arca’s CIO Jeff Dorman says the sale signaled Strategy may become a forced seller, not AI rotation
- Michael Saylor blamed the drop on $400 billion in AI capital flowing into data centers and chips
- Strategy still holds over 843,000 BTC but the position sits roughly $10 billion underwater on paper
Bitcoin dropped nearly 14% last week, briefly touching a 2026 low of $60,800. The selloff has sparked a public disagreement over what caused it.
Strategy Executive Chairman Michael Saylor says the drop is the result of capital rotating into AI infrastructure. Crypto investment firm Arca says that explanation doesn’t hold up.
Saylor Points to AI Spending
Saylor posted on X that capital markets are funding AI infrastructure at historic scale. He cited roughly $400 billion flowing into data centers and chips over six months, with 2026 tech budgets estimated above $600 billion.
He called it a rotation, not a collapse. “Volatility creates opportunity,” he wrote.
Saylor also pointed to Bitcoin ETF outflows. More than $4.3 billion in BTC has been pulled from ETFs since May 14, with no positive inflow day recorded since May 13, according to data from Farside Investors.
Bitcoin is currently trading around $63,000, down roughly 50% from its all-time high of $124,000. Strategy stock is down 66% over the past year.
Arca Says the Sale Was the Signal
Arca CIO Jeff Dorman wrote in his weekly note that the selling pressure was “clearly due to the Saylor/MSTR news,” calling Saylor’s AI explanation “gaslighting.”
Dorman’s argument centers not on the size of the sale — 32 BTC worth about $2.5 million is small — but on what it implied. It was Strategy’s first bitcoin sale since 2022. It was used to fund preferred stock dividends.
That raised a question the market couldn’t ignore: if Strategy sold bitcoin to cover one month of dividends, what happens next month?
Dorman noted Strategy has roughly five months of cash flow remaining. The company recently used its cash to retire $1.5 billion in convertible notes at a discount, leaving less cushion for dividend payments going forward.
Strategy’s preferred stock STRC slipped below its $100 par value to $95.35, a sign the market is pricing in risk.
What Could Stabilize Things
Dorman outlined one scenario that could calm markets. If Strategy raised $2 to $4 billion through stock and bitcoin sales and announced it publicly via an 8-K filing, covering preferred dividends through September 2028, he believes the market would rally.
But he doesn’t think Saylor will do it. “Saylor is basically addicted to buying Bitcoin,” he wrote. The more likely path, in Dorman’s view, is small monthly sales just large enough to cover dividends — steady, low-level selling pressure.
Strategy holds 843,706 BTC at an average cost of $75,699. With bitcoin near $63,000, the position is roughly $10 billion underwater on paper. That loss is unrealized, but it still weighs on the stock.
Of 18 analysts covering Strategy stock, 15 rate it a strong buy. The average price target is $363.62.
One constructive note from Dorman: early in the week, bitcoin fell on its own while other crypto assets held steady. He called that a sign of growing market sophistication — investors pricing each asset individually rather than selling everything at once.
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