Bitcoin dropped more than 1% on Tuesday and traded below $60,000 as the Japanese yen slid to 162.40 per U.S. dollar, its weakest level since October 1986. The move stirred fresh volatility in currency markets. The largest cryptocurrency by market value also remained below its 200-week simple moving average, a level closely watched by traders.
Strategy plan adds to concerns over possible BTC selling
On Monday, Strategy, the world’s largest publicly listed holder of bitcoin, approved a plan to repurchase up to $1 billion of its preferred shares and Class A common stock. The company is also launching a $1.25 billion monetization program to raise capital, including through bitcoin sales. In practical terms, that raises the prospect of more than $1 billion worth of BTC being sold into an already weak market. The shift stands out because founder Michael Saylor has long been associated with the message of never selling bitcoin.
Some market watchers do not see the move as a lasting fix. Strategy’s yield-focused preferred stock, STRC, has fallen sharply in recent weeks, weakening one of the company’s main funding routes for additional BTC purchases. Arca CIO Jeff Dorman wrote on X that the issue had merely been pushed out “for a year or two.” He also said capital structure trades would resurface because, in his view, there is no solution that satisfies all parts of the structure unless BTC surges.
Dorman added that Saylor could still make more “unforced errors,” pointing to debt repayment as the decision that started the current chain of problems. He said the company retired $1.5 billion in debt at the cost of $40 billion in enterprise value destruction.
Yen weakness deepens as dollar index rebounds
The yen’s decline has been building for some time, but the recent move has become more severe. For years, the currency has been widely used to fund carry trades, where investors borrow cheaply in yen and deploy that capital into higher-yielding risk assets around the world. Since 2021, the yen has fallen roughly 57% against the dollar. The main driver is the gap in monetary policy: U.S. Federal Reserve rates were raised to above 5% at one stage, while Japanese rates stayed near zero. The Bank of Japan only recently lifted its policy rate to around 1%, still well below the U.S. level of about 3.5%.
As the yen weakened, the dollar strengthened broadly. The Dollar Index, which tracks the U.S. currency against major fiat peers, rebounded to 101.32 from near 101 on Monday. That combination of a stronger dollar and pressure on risk assets left bitcoin facing another bout of downside stress.