Is the AI trade, Strategy, or macro factors to blame for bitcoin woes?
Michael Saylor says don’t blame Strategy after Jim Cramer said he “murdered bitcoin.”
Bitcoin has been facing several headwinds, including the AI trade, massive outflows from bitcoin ETFs, as well as macro and geopolitical factors. Strategy’s bitcoin sale last week dampened sentiment, to say the least, and even though the company resumed buying on Monday, bitcoin is still stuck in a narrow range below $62,000.
Strategy cofounder Michael Saylor blamed bitcoin’s woes on the AI trade, which, he said on X, “is absorbing capital at historic scale, creating temporary pressure across global markets,” adding that this “does not weaken Bitcoin.”
Jeff Dorman, Arca CIO, called Saylor’s take “nonsense,” arguing that while the AI trade is having an impact, “last week’s BTC selloff was primarily due to MSTR becoming a seller,” adding that the company “crashed the market.”
Jim Cramer went further, saying Saylor “murdered bitcoin.”
Bernstein analysts, however, are siding with Saylor, blaming the AI trade, but with a more nuanced outlook. While retail investors are running to the new “shiny object,” bitcoin’s market structure is diversified and has matured, they said.
“The criticism has largely come from its lack of retail momentum — which may not be a bad thing considering retail has crowded into AI. Bitcoin being boring this cycle should not be held against it and does not take away from the long-term ‘store of value’ thesis, in our view,” they said in a note.
The analysts also said that bitcoin ETFs have seen $2.6 billion in outflows this year out of the $75 billion in total assets under management, which, “in a market completely dominated by retail’s obsession with AI,” is “almost encouraging.”
Meanwhile, Markus Thielen, head of research at 10xResearch, said the market “has been blaming the wrong suspect.”
In a report, Thielen said Strategy is not the problem: it’s been the key buyer since May 12, absorbing $2 billion while everyone else sold.
The real pressure, he said, comes from bitcoin ETF redemptions and what tomorrow’s inflation print will show.
Bitcoin ETFs have registered $1.81 billion in outflows this month. If they stay in the red this week, it would mark the fifth consecutive billion-dollar weekly outflow, per SoSoValue.
“The macro setup is what matters now,” Thielen said, adding that 10xResearch models forecast a 4.3% CPI print on Wednesday, which would be above analysts’ estimate of 4.2%. It would also be higher than the prior CPI print of 3.8%.
Thielen said that a print over 4% “would revive Fed rate hike pricing and give ETF sellers a fundamental reason to continue.”
“What traders should be doing: hold off on new longs until Wednesday’s CPI print. Institutional ETF flows are driving price; follow the money, not the narrative,” Thielen said.
Derivative markets are pricing in a 7% move in bitcoin this week, implying a trading range of about $57,395 to $66,038, expanding to around 8.9% the following week, putting the range at $56,249 to $67,235, he said.
Tim Sun, a senior researcher at HashKey, also underscored that the macro environment is creating a cautious sentiment, with decreasing appetite for risk assets.
“Rising inflation expectations have pushed back the expected timeline for interest rate cuts, while the labor market remains resilient. This means that, in the short term, the Federal Reserve lacks sufficient conditions to ease monetary policy,” Sun told Sherwood News.
Finally, in the near term, bitcoin’s recovery toward the $70,000 to $75,000 range remains plausible if key support levels hold, said Lacie Zhang, a research analyst at Bitget Wallet. Yet, Zhang told Sherwood the key macro variable to watch is a hotter print, which “could bring the $55K scenario back into play faster than expected.”
