Bitcoin is tanking. Despite a modest rebound in the past day, the price of the world’s largest cryptocurrency is down about 5% over the past week and 20% since May, according to data from CoinGecko. Ethereum, the world’s second-largest cryptocurrency, has seen comparable declines, and the total crypto market capitalization has dropped 36% in a year to now just over $2 trillion.
The market rout comes amid declining confidence in the Bitcoin-amassing giant Strategy, which currently holds almost $51 billion in the cryptocurrency, or roughly 4% of the world’s total supply, according to the company’s own data.
The company’s stock almost halved over the past month to now around $85. And STRC, a form of Strategy stock that executive chairman Michael Saylor has repeatedly touted, has broken its $100 peg. Now, the asset, which is designed to pay holders a rich monthly dividend, is trading at slightly above $75.
“People are worried that [STRC’s downturn] is going to force Strategy to sell Bitcoin to raise cash in the market, and that’s creating a negative psychological environment,” Matt Hougan, chief investment officer at the crypto asset manager Bitwise, told Fortune.
The crypto downturn also comes as consumers grow increasingly concerned about a potential interest rate hike, after Federal Reserve Chair Kevin Warsh recently emphasized the need to rein in inflation. Increased interest rates usually prompt investors to flee from riskier assets like crypto.
