Bitcoin Drops 1% Amid Geopolitical Tensions and ETF Outflows

Bitcoin (BTC) has experienced a marginal decline during the ongoing session, remaining pinned under the 20-day Simple Moving Average (SMA). The flagship cryptocurrency has started the new month shrouded in uncertainty, with market watchers unsure where the market will head. BTC had plunged to an intraday low of $103,734 on Monday before rebounding to reclaim $105,000 and move to its current level of $105,980.

The subdued price action of Bitcoin indicates a risk-off sentiment in the market. This sentiment is driven by renewed trade tensions between the US and China, geopolitical tensions, and continuous outflows from spot Bitcoin ETFs. The risk-on sentiment took a beating as tensions escalated in the Middle East after Israeli soldiers opened fire on people who strayed from a designated route to a food distribution site. Apart from escalating tensions in the Middle East, the Russia-Ukraine war has also seen an increase in hostilities.

Institutional demand has also weakened, with outflows of $267 million from spot Bitcoin ETFs on Monday. While the outflows are relatively lower compared to February, an increase could lead to a substantial decline in BTC’s price. Despite trading in positive territory, markets remain cautious, expecting more geopolitical volatility. Markets are pricing out the Ukraine-Russia peace deal, indicating that the situation is far from resolved.

BTC registered a sharp drop on Friday (May 23), falling nearly 4% to $107,356. Despite overwhelming selling pressure, BTC recovered over the weekend, rising 0.46% on Saturday and 1.16% on Sunday to reclaim $109,000 and settle at $109,103. The price continued to push higher on Monday, registering a marginal increase, but was back in the red on Tuesday, dropping 0.46% to $108,954. Sellers retained control on Wednesday as BTC fell 1.03% to $107,834.

Selling pressure intensified on Thursday as BTC fell over 2%, slipping below the 20-day SMA and settling at $105,662. Price action remained bearish on Friday as BTC fell 1.51%, falling below $105,000 and settling at $104,067. BTC recovered over the weekend, rising 0.69% on Saturday and nearly 1% on Sunday to reclaim $105,000 and settle at $105,775. BTC fell to an intraday low of $103,734 on Monday as selling pressure returned. However, it rebounded from this level to register a marginal increase and settle at $105,903. The current session sees BTC up almost 1%, trading around $106,743, as buyers look to build momentum and push towards $110,000.

Michael Saylor’s Strategy plans to raise $250 million through an initial public offering of a new class of perpetual preferred stock to fund additional Bitcoin purchases. The company will issue 2.5 million shares of its 10% Series A Perpetual Stride Preferred Stock at $100 per share. Proceeds from the raise will be used to fund future Bitcoin purchases and provide working capital. Perpetual preferred stocks pay fixed dividends indefinitely with no maturity date and typically get priority over common stock in payouts. The offering gives Strategy a new avenue to raise funds for Bitcoin purchases. The company primarily funded Bitcoin acquisitions through common stock and convertible note offerings. Strategy has become the world’s largest corporate Bitcoin holder with 580,955 BTC worth over $67.7 billion. The $250 million from its latest offering will allow the firm to purchase 2,351.8 BTC at current prices.

21Shares has announced a 3-for-1 share split for its flagship ARK 21Shares spot Bitcoin ETF, ARKB. The move aims to make the fund more accessible to retail investors and will take effect at market opening on June 16. The split will triple the number of shares available and reduce the price per share without impacting the fund’s value. ARKB will continue to trade under its current sticker. The fund is a physically backed spot Bitcoin ETF tracking the New York Variant of the Chicago Mercantile Exchange CF Bitcoin Reference Data, providing investors with direct access to Bitcoin in a regulated investment environment.

Bitcoin-focused Matador Technologies has announced it will begin trading on the Frankfurt Stock Exchange. The listing adds a key European listing to its existing US and Canadian markets. The listing aligns with Matador’s goal of offering round-the-clock trading access to its shares, modeled on Bitcoin’s 24/7 trading schedule. Matador has branded itself as a Bitcoin ecosystem company focusing on building a Bitcoin-backed treasury and fintech platform.