TLDR
- Mike Novogratz linked Bitcoin’s selloff to a confidence crisis around Strategy.
- Strategy sold 32 BTC between May 26 and May 31 for about $2.5M.
- Novogratz said the sale weakened the “Saylor never sells” market narrative.
- Bitcoin traded near the $59K–$60K support zone during the selloff.
- Novogratz warned Bitcoin could fall toward $45K if support breaks.
Galaxy Digital CEO Mike Novogratz said Bitcoin’s latest selloff is being driven by a confidence crisis linked to Strategy and Michael Saylor’s long-running Bitcoin accumulation model.
Novogratz said Strategy’s sale of 32 BTC between May 26 and May 31 damaged the market belief that the company would never sell Bitcoin. The sale was small compared with Strategy’s total holdings, but he said the market reaction came from the break in the “never sell” narrative.
Strategy sold the 32 BTC for about $2.5 million at an average price near $77,135 per coin. The company still holds roughly 844,000 BTC, making it the largest publicly listed corporate Bitcoin holder.
Strategy Sale Raises Market Doubts
Novogratz said the sale created a psychological shift because Strategy had built its public identity around Bitcoin accumulation. He said the company’s unrealized losses, preferred stock obligations, and weak share prices have made investors question whether more sales could follow.
“There’s a sense of vulnerability because of the $14 billion unrealized loss,” Novogratz said. He added that markets often move toward “pain points” to test whether a stressed market participant can withstand pressure.
Strategy’s average Bitcoin acquisition cost is around $75,699, while Bitcoin recently traded near $59,000 to $60,000. That gap has increased attention on the company’s balance sheet and capital structure.
MSTR shares recently traded near $82, while STRC preferred shares fell to about $74 against a $100 par value. The decline in STRC has added concern because the security carries dividend obligations and has been part of Strategy’s funding model.
Bitcoin Support Zone Comes Into Focus
Novogratz said Bitcoin’s $59,000 to $60,000 range is a critical support zone. He said a break below that area could open a path toward $45,000, while a recovery above $62,000 would suggest support is holding.
At the time cited in the report, Bitcoin traded near $59,870 and was down about 6.5% over the week. The asset also recorded one of its largest weekly losses since late 2022 during the recent decline.
Novogratz said he sees similar odds for Bitcoin moving toward $45,000 or $85,000. His forecast remains a market view and depends on whether support holds, ETF flows stabilize, and forced selling risks remain contained.
The Rosen Law Firm has opened an investigation into potential securities violations linked to Strategy, adding another area of uncertainty. The investigation is not a finding of wrongdoing.
Macro Pressure Adds to Bitcoin Weakness
Novogratz also cited macroeconomic pressure as another factor behind Bitcoin’s decline. He pointed to hawkish Federal Reserve signals and a strong U.S. dollar, both of which can weigh on risk assets.
He said the new Fed leadership under Kevin Warsh has taken a hawkish stance, while Treasury Secretary Scott Bessent has backed a strong dollar. These conditions have added pressure on Bitcoin, gold, and other assets tied to liquidity expectations.
Spot Bitcoin ETF outflows have also weighed on the market. Reports said U.S. spot Bitcoin ETFs have seen outflows for seven straight weeks, with more than $1.8 billion leaving over about a week and a half.
Novogratz said he does not expect a sharp collapse if a full Fed rate-hike cycle does not develop. However, he said Bitcoin remains in a bearish trend while macro conditions stay tight.
Strategy Still Has Cash Cushion
Despite his concerns, Novogratz said he does not view Saylor as a forced seller. Strategy has about $1.4 billion in cash reserves, enough to cover dividends for roughly 14 months, according to the provided data.
That cash position gives the company time to manage obligations, although investors remain focused on STRC’s discount to par and the risk of future Bitcoin sales. Any larger sale could affect sentiment because Strategy’s holdings are closely watched across the market.
Novogratz also warned that pressure may come from outside crypto. He said the AI boom may be near a peak and that future Anthropic and OpenAI IPOs could pull liquidity away from digital assets.
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