Bitcoin's slide below $60,000 has been widely attributed to Michael Saylor's Strategy (MSTR) selling coins for the first time since 2022. But Markus Thielen, founder of 10x Research, pushes back hard.
Inflation, Not MSTR, To Blame
In a Monday note, Thielen wrote that investors misdiagnosed the selloff. Since the April U.S. CPI print came in hotter than expected on May 12, spot Bitcoin ETFs listed in the U.S. have seen about $5.4 billion in net redemptions. Meanwhile, Strategy accumulated roughly $2 billion worth of BTC during the same period. "Strategy is not the problem," Thielen emphasized.
Wednesday's CPI Could Decide the Next Move
All eyes now turn to the May CPI report due Wednesday. 10x Research's model projects annual inflation at 4.3%, above both last month's 3.8% and the consensus estimate of 4.2%. A reading above 4% would reinforce fears that the Fed must keep rates higher for longer — or even consider hikes. That's a nightmare for risk assets. Traders have fully priced out rate cuts and are now discussing a potential hike.
Weak Flows Across the Board
Beyond ETFs, stablecoin outflows accelerated: $1.7 billion last week and $5.5 billion over the past month, indicating capital leaving crypto. Bitcoin futures open interest also plunged sharply as traders reduced exposure, Thielen noted.
Short-term Bounce Possible, but Fade Likely
While BTC looks technically oversold after the drop, Thielen cautioned against treating a relief rally as a sustained recovery. If inflation surprises to the upside, any bounce will likely fade. "Institutional ETF flows are driving price," he wrote. "Follow the money, not the narrative."