Bitcoin has plunged below $61,000, extending a brutal decline that has now erased more than half of the cryptocurrency’s value since its October 2025 peak.
But the bigger story may not be Bitcoin itself.
The forces driving this sell-off are very different from previous crypto crashes. Instead of retail traders fleeing speculative assets, Wall Street institutions, corporate treasuries, and Bitcoin exchange-traded funds are increasingly shaping price action. And right now, many of those buyers appear to be heading for the exits.
The result has been a painful stretch not only for Bitcoin holders, but also for publicly traded crypto companies whose fortunes are tied directly to the digital asset.
Wall Street’s New Bitcoin Problem
Bitcoin traded near $61,000 on Wednesday after briefly dipping below $60,000 earlier this month. The decline marks one of the sharpest drawdowns since the cryptocurrency reached record highs less than a year ago.
According to Deutsche Bank, the primary driver behind the weakness is a major shift in interest-rate expectations.
Just months ago, many investors expected the Federal Reserve to begin cutting rates in 2026. Now some economists expect the opposite. Deutsche Bank forecasts two rate hikes next year, creating a much less favorable backdrop for risk assets.
Higher interest rates increase the attractiveness of cash and bonds while reducing demand for speculative investments such as cryptocurrencies.
That shift has become increasingly visible through the ETF market.
Spot Bitcoin ETFs have experienced six consecutive weeks of net outflows totaling approximately $6 billion. Roughly $2.4 billion of that exodus occurred in June alone.
Deutsche Bank analyst Marion Laboure said Bitcoin is increasingly behaving like a traditional institutional risk asset rather than a retail-driven alternative investment.
When institutional allocators buy, Bitcoin rises.
When they sell, Bitcoin falls.
And right now, the flows are moving in the wrong direction.
The AI Boom Is Pulling Money Away From Crypto
Bitcoin is also facing an unexpected competitor for investor dollars.
Artificial intelligence.
Major technology companies are expected to spend more than $700 billion on AI infrastructure during 2026, creating one of the largest investment themes in modern market history.
For many investors, Bitcoin and AI-related assets now compete for the same pool of speculative capital.
As money flows into AI opportunities, less capital remains available for crypto investments.
The connection became especially apparent this week when a broader technology sell-off hit both sectors simultaneously. The Nasdaq 100 dropped as much as 3.4%, while Bitcoin followed lower.
The growing correlation has reinforced concerns that Bitcoin is no longer trading as a hedge against traditional markets. Instead, it is increasingly behaving like another high-beta technology asset.
Crypto Stocks Are Falling Even Faster
While Bitcoin has suffered significant losses, crypto-related stocks have endured even more severe declines.
Among the hardest hit has been Strategy, the largest corporate holder of Bitcoin.
Shares have fallen for five consecutive trading sessions and are down more than 20% during the past week alone. Over the past month, the stock has declined approximately 26%.
Investors were particularly rattled after Strategy disclosed the sale of 32 Bitcoin for roughly $2.5 million in May.
The transaction was significant because it represented the company’s first Bitcoin sale since 2022.
For years, Strategy built its reputation around a simple message: buy Bitcoin and never sell it.
The decision to liquidate a portion of its holdings raised questions about whether financial pressures are beginning to mount.
The company currently carries five series of preferred stock with estimated annual dividend obligations between $750 million and $800 million. Meanwhile, cash reserves have reportedly fallen from approximately $2.25 billion at the beginning of 2026 to roughly $900 million.
The Bitcoin Treasury Trade Is Being Tested
Another company feeling the pressure is Strive Asset Management, backed by Vivek Ramaswamy.
Strive recently purchased 2,500 Bitcoin for approximately $185 million at an average cost of $74,092 per coin.
With Bitcoin now trading below $61,000, that position is deeply underwater on paper.
Investors responded negatively after the purchase became public, sending shares lower amid concerns about aggressive accumulation strategies executed near market highs.
Strive currently owns approximately 19,864 Bitcoin valued near $1.3 billion.
Like Strategy, the company also faces ongoing preferred dividend obligations regardless of where Bitcoin trades.
That reality highlights a growing risk within the Bitcoin treasury model.
These companies effectively use leverage and capital markets to increase Bitcoin exposure. That strategy can amplify gains during bull markets, but it can also magnify pressure during prolonged downturns.
Coinbase and Circle Are Feeling the Heat
The weakness is not limited to Bitcoin treasury companies.
Shares of Coinbase fell roughly 2.5% this week as trading activity slowed and investor sentiment deteriorated.
Meanwhile, Circle, the issuer behind the USDC stablecoin, dropped more than 4%.
The declines suggest investors are becoming increasingly cautious about the broader crypto ecosystem rather than simply reacting to Bitcoin’s price movement.
Historically, crypto stocks often act as leveraged bets on Bitcoin itself. When sentiment turns negative, those stocks frequently decline faster than the underlying asset.
What Investors Should Watch Next
The next major test for Bitcoin will likely come from institutional flows.
If ETF outflows begin to stabilize and Federal Reserve expectations soften, Bitcoin could find support after its recent collapse.
However, if institutional selling continues and rate expectations move even higher, pressure could remain intense throughout the second half of the year.
For now, Bitcoin’s slide below $61,000 serves as a reminder that the market’s biggest buyer has changed.
Retail investors helped fuel previous crypto booms.
Today, Wall Street is increasingly in control.
And right now, Wall Street appears to be selling.
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