Market update | June 26th, 2026

A new sentiment and macro shock for Bitcoin

Bitcoin briefly traded down to US$58,000 before recovering convincingly. The move points to meaningful resistance at the US$60,000 level, but the strength of the bounce also tells us there is genuine buyer interest on dips. We read the recovery as encouraging, even if the broader backdrop remains challenging.

What is weighing on digital assets

Two forces dominate the near-term picture. The first is the AI selloff. The Morningstar AI Index has fallen 6.1% over the past two days, dragging broader tech sentiment lower and pushing investors toward safe havens, the dollar in particular. The cross-asset moves carry the classic risk-off signature, with the Australian dollar, New Zealand dollar and Canadian dollar all selling off while the yen held firm. This is not purely a Fed story, but the macro overlay is not helping.

The second is rates. Core PCE is released yesterday, came in line with expectations (3.4% in May), but the accompanying consumer spending data was above expectation, another data point to retain the FED hawkish stance. We have already seen meaningful shifts in rate expectations following Kevin Warsh's first meeting as Chair last week, and that tighter-for-longer backdrop continues to act as a headwind for Bitcoin.

Strategy contagion fears

STRC, the yielding component of Strategy, has dropped to 75 from par at 100, with SATA down to 88. Some of this reflects cannibalisation between the instruments, but the market is reading it as a signal of broader fragility. Strategy's Bitcoin holding, at around 4% of total supply, is not a systemic risk, yet it is weighing heavily on sentiment. Global ETP issuers in digital assets recorded US$1.4B in net outflows across all digital assets this week so far.

One encouraging signal: whales have stopped selling

Whale selling, the key trigger for the October selloff, has cooled dramatically, and this matters. Working from the four-year Bitcoin cycle, we estimated that selling would taper 6 to 9 months after it began, and that is playing out roughly on cue. The caveat is that whales historically do not re-enter as buyers until the next halving, which is not due until 2028, so price support from this cohort remains some way off.

The outlook

We expect conditions to stay subdued in the near term, with the inflation picture the key variable. Higher oil prices feeding through from the Iran situation are likely to keep CPI elevated for at least the next couple of months, sustaining the Fed's hawkish stance. A genuine turnaround in Bitcoin sentiment would probably require a meaningful deterioration in employment data, and we see no sign of that yet.

Ethereum: Foundation restructuring and regulatory uncertainty

The Ethereum Foundation has cut 54 staff, around 20% of its workforce, as part of a months-long reorganisation into five domain clusters: protocol, access, user, community and institutional. Several high-profile departures have weighed on ETH sentiment. Ethlabs is not a hostile rival to the Foundation, but it is a new power centre in core development, and it potentially reduces the Foundation's monopoly over funding and the coordination of senior protocol talent. That is probably healthy if it adds redundancy and execution capacity, though it raises governance questions: who sets priorities, how independent the research agenda is from corporate ETH treasury backers, and whether institutional adoption begins to shape protocol work more visibly.

The other overhang is the CLARITY Act, though its progress is more advanced than an early-July signature timeline would imply. The bill passed the House in July 2025 and cleared the Senate Banking Committee on 14th May in a bipartisan 15 to 9 vote, but two steps still remain. First, a full Senate floor vote, where the ethics provision on officials profiting from crypto still needs resolving to reach the 60-vote threshold. Second, reconciliation with the House version before it can reach the President. With the Senate's bandwidth consumed by the Iran situation, a signature in the coming weeks looks unrealistic, and the more credible window is around the August recess. If it slips beyond that, the approaching mid-term elections risk slowing the floor vote further. Ethereum is arguably the asset best placed to benefit from passage, particularly given its smart contract infrastructure, but the timing remains genuinely unclear.