Key points to remember:
- Soaring oil prices and rising producer inflation have pushed traders to price in tighter monetary policy from the US Fed.
- Massive Bitcoin ETF outflows in June show that the cryptocurrency is currently failing to act as a stock market hedge.
The Nasdaq 100 index fell 7.5% in the seven days to June 10, wiping out $2.7 trillion in market value. The fallout represents more than double the total market capitalization of Bitcoin (BTC) and has put traders on alert, especially as inflation data feels the heat of high oil prices. Traders now fear that Bitcoin support near $60,000 is under threat.
Nasdaq 100 futures (left) versus Bitcoin/USD (right). Source: Trading View
The ongoing war in Iran has pushed Brent crude oil prices above $90, prompting investors to fear an economic slowdown and price in tighter monetary policy for longer than expected. Regardless of labor market conditions, the money available for consumption tends to decrease.
The U.S. Labor Department reported Thursday that its producer price index jumped 6.5% from May 2025, the highest level since 2022. Traders now expect a 40% chance that the Fed will raise interest rates by September, up from 5% a month earlier, according to the CME. FedWatch tool.
Annualized base rate of 2-month Bitcoin futures. Source: Lightness
Bitcoin futures traded below the neutral 4% premium to regular spot markets on Thursday, indicating weak demand for bullish leverage. Meanwhile, SpaceX’s (SPCX US) upcoming $75 billion IPO was oversubscribed by more than 2x, signaling that investors are not yet ready to give up hope for further growth in the tech sector.
AI infrastructure companies desperately need cash to fuel their developments, which partly explains the negative market reaction. Google (GOOG US) announced plans to raise $80 billion, while Oracle (ORCL US) and Super Micro Computer (SMCI US) followed suit with $40 billion and $7 billion, respectively. Friday’s debut of SpaceX shares will likely set the tone for future IPOs.
Selected stock market performances from the AI sector. Source: TradingView and Cointelegraph
It seems premature to consider the AI sector a bubble after SpaceX scored the largest IPO in history, with a valuation of $1.77 trillion. Additionally, the US stock market reacted positively after US President Donald Trump called off planned strikes against Iran, citing the resumption of negotiations to reopen the Strait of Hormuz.
Strategy accumulation pause amid spot Bitcoin ETF exits
Bitcoin’s decline coincided with Strategy’s (MSTR US) decision to temporarily halt its Bitcoin accumulation in order to reduce convertible debt. As a result, Strategy’s cash position fell to seven months of dividend coverage, while its Stretch Variable Preferred Stock (STRC US) moved away from the $100 level that would allow new stock issuances.
Daily net flows of US-listed Bitcoin spot ETFs, in USD. Source: SoSoValue
Outflows of $1.9 billion from Bitcoin spot exchange-traded funds (ETFs) in June reinforced bearish sentiment as the metric serves as a proxy for institutional demand. At present, Bitcoin can hardly be considered a hedge against a possible stock market liquidation; the likelihood of a further correction below $60,000 should not be ruled out.
