While bitcoin Strategy chairman Michael Saylor blamed the AI boom for last week’s bitcoin selloff, and crypto investment firm Arca is pointing the finger at Saylor himself.
“The selling pressure last week was clearly due to the Saylor/MSTR news,” Arcas Chief Investment Officer Jeff Dorman wrote in his weekly note, pushing back on what he called “gaslighting by MSTR and other Bitcoin bulls.”
Bitcoin, the leading cryptocurrency by market capitalization, fell nearly 14% to $60,000 last week. The sale came after Strategy revealed on June 1 that it sold 32 BTC in the previous week. The strategy still holds 845,256 BTC worth billions of dollars.
Saylor attributed the sharp slide in AI infrastructure spending to absorbing capital on a historic scale.
“The AI buildup is absorbing capital on a historic scale, creating temporary pressure across global markets. It does not weaken Bitcoin. It strengthens the case for scarce, liquid, digital capital. Bitcoin remains the leading asset for the long term,” Saylor said.
Arca isn’t buying it.
Dorman’s argument is straightforward. What crashed the market was not the amount of BTC sold, which was only 32, worth about $2.5 million, but the realization of what the sale implied: that the strategy may need to sell significantly more bitcoin to meet the cash dividend obligations on its preferred stocks, including STRC.
In Arca’s view, Saylor has made a series of missteps over the past three weeks. He used his only cash to pay off zero-coupon debt, then rattled the markets by teasing a $2.5 million bitcoin sale, barely enough to cover a month’s preferred dividend. The strategy currently has about five months of cash flow remaining, Dorman noted, leaving the market to wonder what comes next.
The bullish scenario
Dorman says there is one scenario that could quickly stabilize things. If Saylor announces via 8-K filing that the strategy has raised $2 billion to $4 billion by selling MSTR shares and bitcoin, enough to cover preferred dividends through September 2028, Dorman believes the markets will rise sharply. That buffer would remove the overhang of the forced seller and give bitcoin room to breathe.
But Dorman doesn’t think Saylor will.
“Saylor is basically addicted to buying Bitcoin,” he wrote, suggesting that the more likely outcome is continued trickle sales, just enough each month to cover the dividend, keeping constant pressure on the market.
“When the world’s biggest buyer becomes a forced seller, the market will keep pushing until there is blood,” Dorman wrote.
The point of light
Last week’s BTC selloff was initially limited to Bitcoin itself and did not immediately spill over into the broader market, a bright spot that points to growing market sophistication, according to Dorman.
BTC’s dominance rate, or its share of the overall crypto market, fell for the second week in a row, hitting a low below 58% for the first time since September.
He noted that early in the week, bitcoin fell on its own idiosyncratic news while other cryptoassets held steady. This, he said, was a clear sign that investors are now assessing each digital asset on its individual risk profile rather than indiscriminately selling everything when the market leader weakens.
“If BTC can move lower on its own idiosyncratic bad news without taking the entire market down, this would be another sign that digital asset market participants are becoming more sophisticated,” he added.
By the end of the week, however, BTC’s selling became too intense and most assets joined the downtrend.
