Bitcoin has continued to weaken in the past week, and despite a small rebound in the past day, the cumulative decline since May has been about 20 per cent. The total market value of the entire encrypted market also fell to just over $2 trillion, as a result of the similar decline in the Taifeng during the same period.

Fortune reports that this turnback is rising in step with the market's concerns about Strategy. The company currently holds nearly $51 billion in bitcoin, or about 4 per cent of the global supply of bitcoin by company disclosure data. As their share prices and the prices of the associated financing instruments fall, investors become concerned that such high-leveraging patterns may put additional pressure on market sentiment.

Strategy-related assets go. Weak

Over the past month, Strategy's share price has almost been cut, the latest being approximately $85. At the same time, this securities product, which was repeatedly mentioned by the Executive Chairman of the company, Michael Saylor, has also collapsed at a anchor level of $100, which is now slightly higher than $75.

Matt Hougan, Chief Investment Officer of Bitwise, stated to Fortune that the market was concerned that the fall of the SDR could force Strategy to raise cash by selling bitcoin, a expectation that was creating a negative psychological environment. While the concern has not yet been translated into a sale that has taken place, it has clearly affected risk preferences.

  • Strategy holds a bitcoin of about $51 billion.
  • The warehouse is about 4% of the global supply of bitcoin.
  • STRC price dropped from $100 above to about $75

Interest rate expected to suppress risk assets

In addition to corporate-level pressures, the macro environment is slowing down the encryption market. It is mentioned that consumer concerns about potential interest rates are rising. Federal Reserve Chairman Kevin Warsh has recently stressed the need to control inflation, and interest rate increases usually weaken investors' willingness to allocate high-risk assets such as encrypted assets.

During the same transaction day, the main United States equity indices were split. The POP 500 index rose slightly, the NASDAQ index fell 0.6 per cent, and the Dow Jones index remained almost the same. The internal fragmentation of risk assets also reflects the fact that the market continues to judge growth and liquidity more cautiously.

Bitwise thinks the deleveraging is nearing its end.

According to Hougan, the recent general fall may mean that the down cycle is coming to an end, especially after the transactions of the digital asset bank have been phased out. Over the past year, many listed companies have followed Strategy ' s example by injecting encrypted assets into the company ' s balance sheet in the hope of increasing the stock price, but the logic of the transaction is now clearly cooling down.

He said that markets were crowding out capital that had previously been excessively expanding. If the United States Congress continues to push for progress on encryption legislation, it is expected that the current market-repressed uncertainties will ease. In his view, once the policy environment had become clearer, the continued investment in Wall Street-to-Sector technology could support the stability of markets in the second half of the year.