10xResearch: Rising inflation, not Strategy, drove bitcoin's plunge

Markus Thielen, founder of 10x Research, said the main driver behind bitcoin's weakness was institutional ETF selling after red-hot April U.S. inflation data, not Michael Saylor's Strategy (MSTR). The market's focus on Strategy's first bitcoin sale since 2022 missed a broader wave of outflows, he argued.

Thielen noted that since the U.S. inflation report for April came in higher than anticipated on May 12, U.S.-listed bitcoin ETFs have seen roughly $5.4 billion in net redemptions. During the same period, Strategy accumulated about $2 billion worth of bitcoin. "The market has misdiagnosed this selloff," he wrote.

"Strategy is not the problem." Attention should now turn to Wednesday's consumer price index report for May. 10x's model forecasts annual inflation rising to 4.3%, above last month's 3.8% and Wall Street's 4.2% consensus, a result that could reinforce concerns the Federal Reserve will need to keep rates higher for longer or even consider additional hikes — unwelcome news for risk assets.

United States

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