Bitcoin Slides Back Toward $60,000 as Strategy Funding Fears Mount

Bitcoin has slipped back toward the $60,000 level, fueling fresh market anxiety. Investor sentiment is weakening as concerns over Strategy’s funding structure collide with the prospect of higher interest rates.

Bloomberg reported on June 18 that Bitcoin fell as low as $62,184 intraday, putting the cryptocurrency back within reach of $60,000 for the first time in about two weeks. It is down about 50% from the record high it set in October last year.

Investors are focused on STRC, the preferred stock Strategy has used to finance its Bitcoin purchases. With STRC trading below its $100 par value, the profitability of that fundraising structure has deteriorated sharply. STRC fell below $83 intraday on June 18, marking a record low.

“All eyes are on where STRC is trading,” Joshua Lim, FalconX’s co-head of global markets, said. The market is testing whether Strategy will keep buying Bitcoin or sell assets to raise cash, he added.

Investors also fear Strategy may sell more Bitcoin to fund dividend payments. Concerns about its cash burden have intensified after the company moved to redeem $1.5 billion of convertible notes due in 2029 ahead of schedule.

The possibility of higher US interest rates is also weighing on risk assets more broadly. Rising rate expectations pose another challenge for Bitcoin and other risky assets, Lim said, making the current market backdrop even tougher.

Strategy shares fell 3.5% on June 18. The stock is down about 14% this week and roughly 70% over the past year.