Key takeaways:
- Surging oil prices and rising producer inflation have pushed traders to price in a stricter US Fed monetary policy.
- Massive spot Bitcoin ETF outflows in June show the cryptocurrency is currently failing to act as a stock market hedge.
The Nasdaq 100 Index dropped 7.5% in the seven days leading up to June 10, wiping out $2.7 trillion in market value. The fallout represents more than twice the entire Bitcoin (BTC) market capitalization and has put traders on alert, especially as inflation data feels the heat from high oil prices. Traders now fear that Bitcoin support near $60,000 stands at risk.
Nasdaq 100 futures (left) vs. Bitcoin/USD (right). Source: TradingView
The ongoing war in Iran has driven Brent crude oil prices above $90, prompting investors to fear an economic slowdown and to price in a tighter monetary policy for longer than previously anticipated. Regardless of job market conditions, money available for consumption tends to decline.
The US Labor Department reported Thursday that its producer price index jumped 6.5% from May 2025, the highest level since 2022. Traders now anticipate 40% odds of an interest rate increase by the US Fed by September, up from 5% one month prior, according to the CME FedWatch Tool.
Bitcoin 2-month futures annualized basis rate. Source: Laevitas
Bitcoin futures contracts traded below the 4% neutral premium relative to regular spot markets on Thursday, indicating low demand for bullish leverage. Meanwhile, the upcoming $75 billion SpaceX (SPCX US) IPO was oversubscribed by more than 2x, signaling investors are not yet ready to abandon hope of further tech sector growth.
AI infrastructure companies are in desperate need of cash to fuel their build-outs, which partially 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. The Friday debut of SpaceX shares will likely set the tone for upcoming IPOs.
Selected AI sector stock performances. Source: TradingView & Cointelegraph
It seems premature to deem the AI sector a bubble after SpaceX marked the largest IPO in history at a $1.77 trillion valuation. Moreover, the US stock market reacted positively after US President Donald Trump called off planned strikes on Iran, citing renewed negotiations to reopen the Strait of Hormuz.
Strategy accumulation pause amid spot Bitcoin ETF outflows
Bitcoin’s decline coincided with Strategy’s (MSTR US) decision to temporarily halt its Bitcoin accumulation to reduce convertible debt. As a result, Strategy’s cash position declined to seven months of dividend coverage, while its preferred variable Stretch (STRC US) shares distanced themselves from the $100 level that would allow further equity issuance.
US-listed Bitcoin spot ETFs daily net flows, USD. Source: SoSoValue
The $1.9 billion in outflows from spot Bitcoin exchange-traded funds (ETFs) in June reinforced bearish sentiment, as the indicator serves as a proxy for institutional demand. Presently, Bitcoin can hardly be considered a hedge against an eventual stock market sell-off; the odds of a further correction below $60,000 should not be ruled out.
