Live markets: bitcoin slides to $65,500 as Strategy’s STRC comes under pressure

Bitcoin (BTC) return above $67,000 has proven short-lived, with the crypto tumbling back to $65,800 in early afternoon U.S. trade.

The decline comes as U.S. stocks are struggling — a rare occurrence of late — the Nasdaq down 0.4% and S&P 500 off 0.6%.

Israeli Prime Minister Benjamin Netanyahu has been making the media rounds this morning, brushing aside the idea that he and President Trump are on the outs and remain committed to victory in Iran and against Hezbollah in Lebanon.

That’s helped oil prices gain about 2% and is likely leading to modest pressure on stocks.

The price action raises a difficult question for crypto bulls: If bitcoin can’t manage to gain, or even stop falling, while other risk assets soar, what’s going to happen to BTC when the inevitable stock correction comes?

Strategy’s bitcoin sales, AI, and the war in the Middle East are dominating the news flow, but interest rates remain an important part of the picture for crypto.

The trajectory of the recent rate rise could accelerate or reverse depending on May’s economic data.

This morning’s ADP jobs number suggested continuing economic strength, with 122,000 jobs added, up from 105,000 in April and ahead of forecasts for 117,000.

The big jobs data comes on Friday, though, with the government’s Nonfarm Payrolls Report. Economists are forecasting just 85,000 jobs to have been added, down from 115,000 in April. The unemployment rate is expected to remain steady at 4.3%.

Interest rate traders are currently forecasting a high probability of one or more rate hikes this year, and have done away with any idea of easier monetary policy.

New Fed Chairman Kevin Warsh will be leading his first monetary policy meeting of the central bank on June 16-17.

While bitcoin (BTC) remains engulfed in a daily run of red candles and is down nearly 50% from its all-time high of $126,000 from last October, U.S. stocks are seemingly hitting records on a daily basis.

And today could mark another milestone.

Ryan Detrick, chief market strategist at Carson Group, notes that the S&P 500 could close higher for the 10th consecutive day on Wednesday. How rare is that? Detrick said it hasn’t happened since 1995, which was the very early stages of the great stock boom of the late 1990s.

Early in the session, the S&P is lower by 0.4%. Bitcoin is down 2.5% over the past 24 hours at $66,600.

Giving credence to the idea that the AI boom is drawing capital away from bitcoin and much of the rest of crypto, AI-linked tokens are sharply higher on Wednesday.

Leading the group was Worldcoin (WLD), the token tied to OpenAI CEO Sam Altman’s digital identity project that uses biometric verification to distinguish humans from AI agents. WLD jumped 25% over the past 24 hours and is now up 53% over the past week.

Near Protocol’s NEAR token gained another 10%, extending its rally to 135% over the past 30 days. The Near blockchain has increasingly positioned itself as infrastructure for AI applications, focusing on enabling autonomous agents and user-owned AI systems.

Another standout was Venice Token (VVV), the native token of Venice.ai, a decentralized AI platform that provides private, uncensored access to AI models. VVV climbed 14% on the day and has surged 121% over the past month.

The gains come as investors continue piling into AI-related themes across markets, even as broader crypto assets struggle. Earlier this week, K33 Research’s Vetle Lunde argued that capital is increasingly rotating toward the AI trade, citing the growing “opportunity cost” of holding bitcoin amid AI-related assets’ outperformance.

Floating around social media is the idea that it’s Iran, not the selling of Michael Saylor’s Strategy, that’s behind much of this week’s price crash.

Last week, Treasury Secretary Scott Bessent announced more than $1 billion of Iranian crypto assets (not bitcoin) had been frozen.

And then yesterday, the U.S. announced sanctions on Nobitex, Iran’s largest cryptocurrency exchange, accusing it of helping the Iranian government and others evade their own sanctions via digital asset networks.

“In my opinion, any coins that could be linked to Iran/Islamic Revolutionary Guard (IRGC) have been dumped to avoid possible sanctions (i.e., tainted coins), buy weapons, resources, etc …,” wrote Alistair Milne on X.

“Of course, not only Iran was selling, but it explains the feeling of constant sell pressure even at obvious support levels and it being quite BTC specific,” he continued.

Bitcoin (BTC) overnight fell all the way back to $65,300, but has since bounced back to the $67,000 area shortly before the open of U.S. stocks.

A check of the charts shows this is the third time bitcoin has dropped to the mid-$60,000 range since its panicky February 6 bottom.

The previous two “re-tests” of that February 6 bottom — February 24 and March 29 — worked out for the bulls, with prices quickly recovering back above $70,000 and eventually to $83,000 by mid-May.

What happens on this third occasion remains to be seen.

U.S. stock index futures are little changed after another round of record highs on Tuesday. The price of oil and bond yields are both modestly higher.