The world’s largest cryptocurrency touched its weakest level since October 2024 after failing to hold support around $65,000, a level traders had treated as critical following last month’s attempted recovery. The latest slide left Bitcoin down by more than 30 per cent for the year and more than 50 per cent below the record highs above $120,000 reached in late 2025.
The fall has challenged the argument that Bitcoin can act as a durable alternative store of value during periods of market stress. Instead, price action this year has shown a market increasingly exposed to the same liquidity conditions and risk appetite that shape equities, credit and high-growth technology assets. The retreat has also come as investors chase stronger near-term momentum in artificial intelligence, semiconductor, memory and cloud infrastructure stocks.
Global equity funds drew more than $21bn in the week to June 3, while technology funds attracted about $9bn, their strongest intake in several weeks. Optimism around AI spending, data centre demand and enterprise computing has kept capital flowing into companies viewed as direct beneficiaries of the investment cycle. Shares linked to servers, chips, power systems and memory have outperformed digital assets, leaving Bitcoin struggling to compete for speculative flows.
The pressure has been most visible in exchange-traded funds. Spot Bitcoin products, which were a major source of demand after their 2024 launch, have seen heavy withdrawals as institutional investors reduce exposure. One leading Bitcoin fund lost more than $3bn between May 18 and June 3, while other large products also recorded outflows. That reversal has undermined one of the strongest pillars of the previous rally, when regulated access helped widen participation among asset managers and advisers.
A further blow came from the first reported Bitcoin sale in years by Strategy, the corporate holder long associated with aggressive accumulation. The move was treated by traders as a symbolic break in a market narrative built around permanent balance-sheet demand. Strategy’s shares fell alongside crypto-linked equities, with Coinbase and several miners also hit by the wider liquidation.
Gold has remained part of the allocation debate, although flows have been uneven. Demand for bullion surged through earlier phases of geopolitical and inflation anxiety, with investors using the metal as a hedge against currency weakness and policy uncertainty. Precious metals funds then saw outflows in the latest weekly data, showing that capital rotation has not moved in a single direction. Even so, gold’s stronger performance over the past year has left Bitcoin facing tougher comparisons as a hedge.
The macro backdrop has added to the strain. Sticky inflation, firmer bond yields and a cautious Federal Reserve have reduced expectations for quick monetary easing. Bitcoin tends to perform best when liquidity is expanding and real yields are falling. This year’s rate environment has made leveraged bets more expensive and reduced appetite for assets that do not produce cash flow.
Market structure has also shifted. Stablecoins now account for a larger share of digital-asset activity, with their role in payments, trading settlement and decentralised finance expanding faster than Bitcoin’s transactional use. Rival tokens linked to payments infrastructure, tokenisation and blockchain settlement have also drawn attention from investors seeking more direct links to financial applications.
Bitcoin supporters argue that the drawdown reflects cyclical positioning rather than a structural failure. Supply remains capped at 21mn coins, exchange balances are still below earlier cycle peaks, and long-term holders have historically used deep corrections to accumulate. They also point to previous crashes that were followed by new highs once liquidity conditions improved.
Arabian Post – Crypto News Network
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