Bitcoin's slide below $60,000 may have less to do with Michael Saylor's Strategy and more with rising inflation, according to Markus Thielen, founder of 10x Research.
In a Monday report, Thielen argued the market has misdiagnosed the selloff. While much attention focused on Strategy's first bitcoin sale since 2022, the bigger factor has been institutional selling through spot bitcoin ETFs.
Since April's U.S. inflation report came in hotter than expected on May 12, bitcoin ETFs have seen roughly $5.4 billion in net redemptions. During that same period, Strategy accumulated about $2 billion worth of bitcoin, making it one of the few significant buyers.
"The market has misdiagnosed this selloff. Strategy is not the problem," Thielen wrote.
Thielen says attention now turns to Wednesday's CPI report for May. 10x's model forecasts annual inflation rising to 4.3%, above April's 3.8% and Wall Street's 4.2% estimate. A reading above 4% could reinforce concerns the Fed will need to keep rates higher for longer, or even consider hikes-unwelcome news for risk assets.
Bitcoin appears technically oversold, but Thielen cautioned against treating a short-term bounce as a sustained recovery. ETF flows remain the key metric. "Institutional ETF flows are driving price. Follow the money, not the narrative," he said.