Abandoned by retail investors? Bitcoin fell below the $60,000 mark, hitting a new low since October last year.

Bitcoin fell below the $60,000 mark again on Wednesday, hitting a new low since October last year. With one of the largest buyers in the cryptocurrency market, Strategy (MSTR.US), facing increasing scrutiny over its financing model, and retail funds continue to flow into hot sectors like artificial intelligence (AI), the crypto market is facing a problem that has been largely ignored for the past two years: who will pick up the slack when the biggest buyer is under pressure and retail investors lose interest? Data shows that Bitcoin fell by 5.4% on Wednesday, hitting a low of $59,023, the lowest since October 2024. In early June of this year, Bitcoin briefly fell below $60,000, and this time again failing to hold this key psychological level has raised concerns about the future trend. At the same time, the stock price of Strategy has dropped for the sixth consecutive trading day, falling to the lowest level since February 2024. Concerns about its financing system continue to grow, while the yield of the company's preferred stock product, STRC, has climbed to around 14%. Shiliang Tang, a managing partner at Monarq Asset Management, stated that the market is reassessing the financing cycle model built by Strategy's common stock and preferred stock (STRC.US). According to CoinGlass data, nearly $800 million in long positions in the crypto market were liquidated in the past 24 hours. Meanwhile, Deribit data shows that this Friday will also see the expiry of Bitcoin options contracts worth around $100 billion, further increasing short-term volatility risk in the market. Over the past few years, whenever Bitcoin has experienced a significant pullback, retail investors have often been active in buying the dip, while Strategy has continued to finance purchases of Bitcoin through issuing stocks and preferred stocks, gradually becoming one of the market's largest incremental buyers. In addition, inflows into Bitcoin spot ETF funds have provided important support to the market. However, this situation is changing now. Analysts pointed out that a large number of ETF investors who entered Bitcoin at high prices are currently in a loss position, weakening their willingness to continue buying. At the same time, more and more retail funds are flowing into AI stocks and other asset categories with stronger performance, reducing new sources of funding for the crypto market. More importantly, the investment logic of Bitcoin as an institutional asset allocation tool is being challenged. During recent periods of escalating tensions in the Middle East and rising inflation concerns, Bitcoin has not demonstrated stable safe-haven properties. Instead, its performance is more akin to a high-volatility risk asset rather than the "digital gold" or portfolio hedging tool promoted by some institutions in the past. Stephane Ouellette, CEO of FRNT Financial, stated that as market expectations for a Federal Reserve rate cut are continuously pushed back, the investment logic of Bitcoin as an inflation hedge is being challenged. At the same time, concerns about Strategy's financing model continue to escalate. Though Strategy has recently resumed buying more Bitcoin, with Bitcoin long below some of its acquisition costs, the company's unrealized losses on its books are continuing to grow, raising doubts in the market about whether it can sustain the pace of large-scale continuous buying as in the past. Especially with the continuous downward pressure on STRC preferred shares, investor anxiety has intensified. Data shows that on Wednesday, STRC hit a low of $79.85, a significant discount from its $100 face value. As this product has been an important tool for Strategy's financing of Bitcoin purchases in recent years, its price performance is seen by many investors as an indicator of the company's financing ability and the sustainability of its Bitcoin acquisition strategy. With the continued pressure on STRC, Strategy's ability to buy Bitcoin through issuing preferred shares in the future may be limited, weakening its role as the largest incremental buyer in the crypto market. The crypto market's dependence on Strategy is now significantly higher than before. Any changes in its financing capacity or purchasing plans could amplify market sentiment. This also means that the Bitcoin market is increasingly relying on institutional funding, and just at this time, institutional investors' confidence in this asset class is facing a test. Noelle Acheson, author of the newsletter "Crypto is Macro Now", said that the current Bitcoin market feels like "many sellers but fewer buyers." She pointed out that when the market begins to lose both retail enthusiasm and institutional incremental funding support, the future trend of Bitcoin may face greater uncertainty.