Bitcoin sinks 50% from peak as Saylor blames AI capital rotation

Bitcoin fell to $63,092 on June 3, its lowest daily close since February, as total crypto liquidations surpassed $1.1 billion.

"Bitcoin is not losing believers — capital is rotating into AI as the market prices in a new compute cycle," Michael Saylor, executive chairman of Strategy, said in a post on X.

The sell-off triggered $945 million in long-position liquidations across centralized exchanges, according to Coinglass data as of 04:00 UTC. Long-term holders — addresses holding Bitcoin for at least 155 days — sold approximately $2.4 billion over the past two days, Compass Point analyst Ed Engel said, marking a shift from months of inactivity.

Bitcoin now trades roughly 50% below its all-time high of $126,000 reached in October 2025, putting the asset in bear-market territory. The next major support sits near $60,000, a level that if breached could trigger another wave of forced selling, traders said.

Bitcoin spot exchange-traded funds recorded their 12th consecutive day of net outflows on Tuesday, the longest such streak on record, according to SoSoValue data. Net assets across the U.S. Bitcoin ETF complex have fallen to $85 billion from $107.8 billion on May 14, a decline of more than 20% in three weeks.

The sell-off rippled across the broader crypto market. Ethereum dropped below $1,800, while Solana and other large-cap tokens posted steeper percentage losses during the same trading window.

Strategy, formerly MicroStrategy, sold 32 Bitcoin on Monday to fund dividend obligations — its first sale since the 2022 FTX collapse. While the amount is negligible relative to the company's roughly 500,000-BTC corporate treasury, the symbolic weight of a sale by Bitcoin's largest corporate holder added to selling pressure, analysts said.

Long-Term Holders Capitulate

Compass Point's Engel noted that 26% of the Bitcoin sold over the past 30 days came from investors whose cost basis was above $90,000 — buyers who held through the drawdown but began capitulating as prices approached new cycle lows. "The capitulation of high-cost buyers is a common feature of the late stages of a bear market," Engel said, reinforcing the view that the selloff may represent a final washout phase.

The AI Rotation Thesis

Saylor's framing of the decline as a capital rotation rather than a crisis of confidence introduces a competing narrative. If institutional capital is shifting from crypto to AI-focused equities, the outflows could persist until AI infrastructure spending shows signs of peaking. Citi analyst Alex Saunders said ETF fund flows explain approximately 45% of weekly Bitcoin return volatility, and with flows persistently negative, a rebound requires a regulatory approval or a shift in fiscal conditions to reverse.

This article is for informational purposes only and does not constitute investment advice.