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Michael Saylor’s Strategy faces further tests after selling Bitcoin (BTC) and $128 million in shares. The firm led the crypto accumulation wave with Saylor backing the digital gold and making a case for massive institutional inflows. However, analysts are beginning to question the wider strategy amid mass liquidations.
Grayscale Flags Possible Risks For Strategy
After selling 32 BTC from its 843,706-Bitcoin stash, the firm faces a stern test that could prompt it to sell more coins and limit its ability to buy. Zach Pandl, Grayscale’s Head of Research, stated that a shift in strategy from Saylor’s firm would have effects on its variable-rate preferred equity instrument, Stretch.
The sales that rocked market sentiment are yet to wear off, and traders are pricing in more hurdles. Bitcoin price dipped 16% this week while Stretch plunged 12% since the sale. With sinking prices, if the company raises dividends, cash obligations also rise, leading to fresh sales.
This creates a cycle that can open up new challenges for the firm. Pandl added that Strategy currently has a limited ability to accumulate tokens at its current price. The company’s dicey situation sank the market to new lows not recorded in months.
Institutional exits are in free fall with consecutive outflows and shrinking assets under management. Last week, funds recorded $1.4 billion in outflows following declining sentiment and intense geopolitical tensions. Long-term traders are also cautious, trying to mitigate losses this month.
 
Bitcoin price has taken severe hits in the past two quarters, falling from an all-time high above $125k to $61k. At press time, BTC is down 2.2% today, extending its weekly losses, and has plunged 23% over the past 30 days. This decline has a ripple effect, with altcoins posting double-digit losses.
Crypto whale deposits also double on centralized exchanges according to new CryptoQuant research. When this happens, it signals initial weakness because assets on centralized exchanges can be offloaded easily, unlike long-term holders who prefer other custodians.
“On Binance, BTC inflows from whales have accelerated sharply, with recorded peaks of approximately 8,200 BTC on June 2nd, followed by over 6 400 BTC on June 4th. On a longer-term basis, the monthly average of whale inflows on Binance has moved from approximately 1 200 BTC since mid-April to over 2 800 BTC today, more than doubling within a matter of weeks.”