Bitcoin and Ether Prices Retreat Amid Institutional Outflows
Digital asset markets are grappling with a significant retreat as institutional demand stabilizes but fails to offset broader selling pressure. While exchange-traded funds see tentative inflows, regulatory scrutiny in the U.K. and operational errors in South Korea are weighing on investor sentiment. This shift comes as Federal Reserve officials suggest the post-election rally may be losing steam. Stay up on the crypto news that matters with "Crypto Currents," daily from The Fly. Join us at 2 PM ET for your essential briefing on the fast-moving world of cryptocurrency on FlyCast radio.FED GOVERNOR WALLER NOTES FADING CRYPTO EUPHORIA AS TRADITIONAL FINANCE FIRMS ADJUST RISK POSITIONS:The initial optimism that propelled digital assets following the U.S. election is beginning to dissipate., Federal Reserve Governor Christopher Waller stated that the "euphoria" surrounding the current administration is fading as the market becomes more entwined with traditional finance. Waller suggested that recent volatility is "part of the game" and noted that mainstream financial firms have had to adjust their risk positions, contributing to the sell-off. Simultaneously, the Federal Reserve is preparing to roll out "skinny master accounts" later this year to provide fintech and crypto firms limited access to the central banking system. However, traditional banking giants are pushing back; the Bank Policy Institute and the Financial Services Forum havebefore such firms can access the U.S. payments infrastructure, citing concerns over safe operations for stablecoin issuers.BITCOIN AND ETHER PRICES RETREAT AMID INSTITUTIONAL OUTFLOWS AND LACK OF FRESH CAPITAL DEMAND:Market sentiment has shifted decisively toward a "risk-off" mood as the two largest cryptocurrencies resume their decline.that ether (ETH-USD) fell as much as 6% to $1,994, while bitcoinslipped 2.4% to $68,666.that, with bitcoin recently touching its lowest levels since October 2024. Institutional activity reflects this cooling sentiment; while U.S. bitcoin ETFs saw a $145M inflow on Monday, the broader trend shows investors have pulled $1.8B from bitcoin products and $462M from ether products so far this year.that fresh capital inflows are not expanding fast enough to absorb the distributed supply, leading to a "downward spiral" in demand momentum.CORPORATE STRATEGIES AND PLATFORM DEVELOPMENTS AMID MARKET TURMOIL:Despite the market downturn, major players are doubling down on their long-term digital asset roadmaps. Michael Saylor of Strategy. In the venture space,to integrate native USDC, issued by Circle, and the cross-chain transfer protocol on the EDGE chain. Furthermore,, a unified infrastructure layer designed to allow institutions to trade FX, crypto, and stablecoins 24/7.REGULATORY ENFORCEMENT AND COMPLIANCE MILESTONES IN GLOBAL MARKETS:Regulatory scrutiny remains high as authorities target non-compliant platforms while others achieve major licensing milestones.that the Financial Conduct Authority has launched High Court action against the HTX exchange for illegal crypto promotions to British consumers. Conversely,. Meanwhile,after the exchange mistakenly credited 620,000 bitcoin to users, raising concerns over "paper bitcoin" and internal controls.PRICE ACTION:As of time of writing, bitcoin was trading at $69,380.53, while ether was trading at $2,025.22,.
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- Debt-to-Equity Conversion: Founder Michael Saylor announced that Strategy Inc. plans to convert its convertible debt into equity over the next three to six years, reflecting confidence in future market conditions.
- Strong Balance Sheet: Even if Bitcoin's price drops to $8,000, Strategy Inc. maintains $49 billion in Bitcoin reserves, sufficient to cover $6 billion in net debt, showcasing robust financial resilience.
- Debt Management Strategy: The company has accumulated over $8.2 billion in debt primarily through convertible senior notes for Bitcoin acquisitions, with no major maturities until 2028, indicating a solid debt management approach.
- Market Reaction: Despite MSTR shares rising 8.85% to $133.88 during Friday's trading, market confidence in its future performance remains weak, with low momentum rankings indicating potential challenges ahead.
- Bitcoin Transfer Advantages: Strategy Inc. Chairman Michael Saylor emphasized Bitcoin's ability to facilitate fast and low-cost global transfers even on bank holidays like Presidents' Day, showcasing its unique advantages in financial transactions.
- Fee Transparency: Saylor shared a Bitcoin fee estimator on social media, indicating a fee of 1 satoshi per virtual byte during low congestion periods, with a final transaction fee of $0.44, highlighting Bitcoin's economic efficiency.
- Confidence in Scalability: Saylor noted that Bitcoin overcame scalability and bandwidth issues during the 2015-2017 blocksize wars, suggesting that markets and innovation can effectively address challenges, thereby enhancing confidence in Bitcoin's future.
- Market Counterarguments: Despite Saylor's support for Bitcoin, some users argued that its low fees stem from weak transaction demand, with Bitcoin's transaction volume sharply declining over the past six months, reflecting the true state of the market.
- Stock Plunge: Strategy's stock (NASDAQ: MSTR) has fallen nearly 60% over the past year, primarily due to its all-in bet on Bitcoin, which has lost almost 30% of its value during the same period, leading to diminished investor confidence.
- Investment Potential: Despite the current stock slump, if Michael Saylor's 'Bitcoin Maximalist' thesis holds true, a $10,000 investment today could grow to $3.09 million by 2046, highlighting the immense long-term potential of this investment.
- Liquidation Risk Analysis: Saylor emphasized that Strategy would only face liquidation risk if Bitcoin's price drops below $8,000, a level significantly lower than its average purchase price of $76,056, indicating relative safety in the company's Bitcoin holdings.
- Investment Strategy Suggestion: For investors bullish on Bitcoin, acquiring shares of Strategy as a proxy for the cryptocurrency could be a wise move, especially if Saylor's thesis proves correct, potentially yielding millions in returns.
- Bitcoin Trading Dynamics: Bitcoin reached an intraday high of $70,060 on Monday but fell back to the $68,000 range due to strong resistance, with trading volume decreasing by 17% from the previous day, indicating a lack of market liquidity.
- Ethereum's Weak Performance: Ethereum crept up to $2,000 overnight; however, its trading volume plummeted by 40% over the last 24 hours, reflecting waning investor interest and a decline in its market dominance.
- Market Sentiment Deterioration: The Crypto Fear & Greed Index indicates a prevailing
- Stock Price Decline: Strategy's stock has plunged nearly 60% over the past year, primarily due to its all-in bet on Bitcoin, which lost almost 30% in the same period, significantly impacting market confidence in the company.
- Investment Potential: Despite the current stock price of $133.88, a $10,000 investment today could potentially grow to over $1 million if its bold Bitcoin bets pay off, highlighting the high-risk, high-reward nature of this investment.
- Bitcoin Price Forecast: Co-founder Michael Saylor predicts Bitcoin's price will soar from about $68,000 today to $21 million by 2046, suggesting that a $10,000 investment in Bitcoin could grow to $3.09 million, further elevating investor expectations.
- Liquidity Risk Assessment: Although Bitcoin's recent drop has fallen below the average purchase price of $76,056, Saylor noted that Strategy would only face liquidation risk if Bitcoin drops below $8,000, providing investors with a certain margin of safety.

- Stock Performance: Coinbase Global's stock has significantly declined in recent months.
- Market Influence: The drop in stock value is largely attributed to the ongoing Bitcoin selloff.









