Autor Cointelegraph By Martin Young

Strategy’s leveraged Bitcoin model is stressed, which could limit the firm’s ability to keep buying BTC and potentially force further sales, according to Grayscale.“The shift in approach from one of the world’s largest BTC holders has weighed on market sentiment,” said Zach Pandl, Grayscale’s head of research, on Thursday. Michael Saylor’s Strategy sold 32 BTC on Monday, a tiny fraction of its total holdings of 843,706 BTC, but enough to rattle market sentiment as the asset has tanked by 16% since the sale. Strategy also sold $128 million worth of shares, and its stock value has declined by 12.8% since the sale to a two-month low of $126 on Thursday. BTC losses accelerated after Strategy sold and STRC declined. Source: Google FinancePandl warned this could have a greater impact on Stretch (STRC), the firm’s variable rate preferred equity instrument.Stretch is designed to trade at a share price of around $100 and pay a dividend of 11.5%, but it is currently trading below that at around $95, meaning investors require a higher rate of return. If Strategy raises its dividend to compensate investors, it increases cash obligations, potentially forcing more BTC sales and further price pressure in a negative feedback loop.“Strategy’s levered business model is under pressure, and this has increased the volatility for the BTC market as a whole,” said Pandl. He added that Grayscale thinks that Strategy will have a “limited ability to accumulate more tokens at current share prices for both STRC and MSTR.”Related: Saylor downplays Bitcoin slide as Strategy faces $11B paper lossGoldbug Peter Schiff said something similar on X on Thursday. If Strategy is forced to increase the dividend to return STRC to $100, the company “will run out of cash much sooner, pulling forward Bitcoin sales to fund payments.”Pandl concluded, stating that less Bitcoin in leveraged corporate holdings would be healthier for the broader market and ecosystem.“For the health of the Bitcoin ecosystem over the long run, less BTC on levered DAT [digital asset treasury] balance sheets and more on diversified corporate balance sheets will be a positive, in our view.”It’s not all bearish for Saylor’s StrategyAugustine Fan, partner at crypto software firm SignalPlus, told Cointelegraph on Friday that markets are blaming Strategy’s recent sales and STRC’s discount to par for driving the latest sell-off, “but the reality is that even the most ardent supporters are running out of reason to be structurally bullish.”“All focus will be on the MSTR situation to see how Saylor manages to handle his liquidity strains by balancing dividend payments against STRC and the DAT holdings.”Jeff Ko, chief analyst at CoinEx, told Cointelegraph that Strategy’s first Bitcoin sale was an “important psychological trigger” for this week’s selloff. However, he said the move was more constructive than the market reaction implied, as it gives the company more flexibility. “Greater flexibility around selling Bitcoin can help Strategy manage balance sheet risk more prudently, rather than forcing itself into a one-way accumulation strategy under all market conditions.”Magazine: Korea’s first memecoin rug-pull case, China’s crypto rules review: Asia Express

The price of ZEC fell on Thursday after the public disclosure of a critical counterfeiting vulnerability in Zcash’s Orchard pool that could theoretically allow a bad actor to mint an unlimited amount of ZEC.According to a post on X, security engineer Taylor Hornby, who was engaged by Shielded Labs, discovered the bug on May 29 and disclosed it to the Zcash Open Development Lab (ZODL), which deployed an emergency response to fix the vulnerability with a hard fork activated on June 3. However, there are concerns about the extent to which the vulnerability, which has existed since May 2022, has been used, leading Zcash to fall more than 30% over the past 24 hours to $410 at the time of writing. Its market capitalization has shrunk by more than $3 billion.However, BitMEX co-founder Arthur Hayes said on Friday it is unlikely that ZEC has been illegally minted this way, though he acknowledged “it cannot be formally cryptographically proved impossible.”“Sadly, due to the Orchard Pool exploit, I had to dump our entire ZEC bag,” he said.“The Holy Trinity is dead,” he added, referring to Zcash and the two other tokens he sold this week, Hyperliquid (HYPE) and Near Protocol (NEAR).ZEC crashes 30% in 24 hours after two months of solid gains. Source:TradingViewClaude assists in bug discovery Taylor used Claude Opus 4.8, which was released on May 28, a day before the discovery, to assist in a highly targeted review of the Orchard circuit, the cryptographic component underlying Zcash’s Orchard shielded pool.The critical bug allowed false inputs into an elliptic curve multiplication check, which means the math that is supposed to cryptographically verify transactions could be fooled.Taylor built and tested a working exploit, which generated unlimited counterfeit ZEC. “If he had run the same tool on Zcash mainnet it would have generated unlimited, undetectable counterfeit ZEC in his mainnet Zcash wallet,” the security researchers said on Friday. The primary concern is that there is no cryptographic way to prove whether anyone had previously exploited it before it was patched, due to Orchard’s privacy properties. However, Shielded Labs was “not overly concerned” because the bug was subtle enough to evade years of expert review, and the discovery was a deliberate, highly skilled effort using cutting-edge tools and AI.Related: Crypto exploit losses in May fall 90% over month to $68M: CertiKThe firm is working with Zcash developers on a proposed network upgrade to allow anyone to verify the integrity of the ZEC supply and to prove the nonexistence of counterfeit tokens in the Orchard pool, they stated. Not the first counterfeiting vulnerability for ZcashMert Mumtaz, co-founder and CEO of Solana tooling firm Helius, said that almost all privacy protocols have a variant of this same vulnerability. “This same FUD comes back every five months as new people learn how privacy pools work,” he said. He explained that it is a theoretical risk in most zero-knowledge privacy protocols from circuit bugs that are hard to exploit or detect.This is not the first time a similar vulnerability in Zcash has been discovered. In 2018, a counterfeiting vulnerability in the cryptography underlying zk-proofs was discovered by the Electric Coin Company, which remediated it with no losses in 2019. Magazine: Big Questions: Do we really only need 2–5 cryptocurrencies?

Arthur Hayes’ investment firm Maelstrom said Worldcoin could surge to as high as $5 per token over the next few months, with WLD acting as a crypto proxy for the AI boom.“The AI mega IPOs are coming — and it appears the market has overlooked one of the cleanest proxies,” said Maelstrom researcher Lukas Ruppert on Wednesday. The AI boom has been in full swing in the US. OpenAI confidentially filed its IPO prospectus with the SEC on May 22, targeting a public debut in September 2026, with the firm aiming to raise $60 billion with a potential valuation of up to $1 trillion. Meanwhile, competitor Anthropic confidentially filed its draft prospectus on Monday after announcing on May 28 that it was valued at $965 billion following a fresh $65 billion funding round. US stock markets such as the S&P 500 have reached record highs this week, primarily due to a surge in AI and memory storage company shares such as SanDisk, Micron, Seagate and Western Digital. However, Ruppert argues that this hasn’t been reflected in the price of WLD, though company purchasing and a change in the token unlock schedule could be catalysts for a rally. WLD is the native token underpinning Worldcoin, a crypto project co-founded by OpenAI CEO Sam Altman aimed at creating a global digital identity and financial network that can distinguish real humans from AI bots.Two potential catalysts for WLD price pumpWLD prices have been downtrending since February, with losses accelerating in March following a private sale of tokens. Worldcoin raised $65 million via an over-the-counter round in March, selling WLD tokens directly to private investors at a negotiated price, outside of any exchange. Of that amount, $25 million is locked for six months. However, to protect themselves against WLD prices dropping before their tokens unlock, buyers hedged by shorting the token on perpetual futures markets in what Ruppert described as a “textbook short overhang.” There are two potential catalysts to reverse this mechanical and temporary overhang, he said. Eightco (ORBS), a small publicly-traded company that has already accumulated 283 million WLD tokens, has around $144 million in cash sitting on its balance sheet. If they use that cash to buy more of the heavily shorted tokens, it could “trigger a reflexive loop,” sending prices higher, he said. Secondly, Worldcoin’s unlock schedule, which releases tokens to the market every day, is set to drop by 43% on July 24, which could cut a major source of selling pressure. Related: Crypto turns ‘contrarian bet’ as AI stocks draw investor attention: Bitwise“Capital is aggressively chasing Anthropic and OpenAI exposure,” said Ruppert. Valuations are in the hundreds of billions and trillions, but WLD trades at $2 billion unlocked market cap, “a small cap, when it comes to AI valuations,” he added, labeling it an “asymmetric upside.”The analyst note comes as WLD is currently the best-performing crypto asset in the top 100 tokens by market capitalization, having surged by around 60% over the past week. “WLD doesn’t move often — but when it does, it moves aggressively,” he said, with Maelstrom predicting the token will reach $5 by August, a gain of around 900% from its current trading price of $0.50. WLD has surged over the past week. Source: TradingViewMagazine: Big Questions: Do we really only need 2–5 cryptocurrencies?

Ethereum treasury company Bitmine Immersion Technologies is launching a $300 million perpetual preferred stock offering, borrowing a page from Strategy’s financing playbook. Bitmine told the SEC on Wednesday that it intends to offer 3 million of its 9.5% Series A perpetual preferred stock at $100 per share, which will trade under the symbol BMNP within 30 days of issuance. Preferred shares are a hybrid of stocks and bonds. Investors are not directly betting on the company’s growth but lending it money in exchange for regular payments. For every $100 share, Bitmine will pay dividends on a weekly basis, amounting to $9.50 per year. The firm plans to use income from its staked Ether (ETH) to pay the dividends, similar to offerings from Michael Saylor’s Bitcoin treasury company, Strategy. Strategy launched its Stretch (STRC) perpetual preferred stock in July 2025. Unlike Bitmine’s BMNP, which has a fixed rate, STRC uses a variable rate that Strategy adjusts monthly with the goal of keeping the trading price stable near $100.STRC has scaled to $8.5 billion in just nine months and is now the largest preferred stock by market cap in the world, according to a May SEC filing. “Digital Credit, highlighted by STRC, has been a big success. STRC has shown strong demand, high liquidity, and low volatility,” said Phong Le, Strategy president and CEO.In March, Le said that roughly 80% of STRC holders were retail investors. Related: 80% of Strategy’s ‘Stretch’ buyers are mom-and-pop investorsBitmine’s annualized staking revenue by week. Source: SECBitmine said the net proceeds of its proposed offering would be used for general corporate purposes, including buying more Ether, expanding staking and validator infrastructure through Made in America Validator Network (MAVAN) and repurchasing common stock. Bitmine announced on Monday that it currently owns 4.49% of the total ETH supply and is 90% of the way to its “Alchemy of 5%” plan in just 11 months.The firm has 4.7 million staked Ether, worth around $8.3 billion at current prices. However, unrealized losses on that ETH are nearly $9 billion.The perpetual stock offering comes at a tough time for Ether investors, with the asset falling more than 12% over the past seven days to a 14-month low of $1,734 in early trading Thursday. “In our view, ETH prices are not reflecting the strengthening of Ethereum fundamentals, but then again, this is not surprising given we are in the early stages of crypto spring,” said Bitmine chairman Tom Lee on Monday. Bitmine stock fell nearly 6% Wednesday to $16.90, its lowest level since it pivoted to Ethereum in June 2025, according to Google Finance. Magazine: Big Questions: Do we really only need 2–5 cryptocurrencies?

Crypto is turning into a “contrarian bet” as institutional investors are being drawn to artificial intelligence stocks, says Bitwise chief investment officer Matt Hougan.“The crypto market is brutal right now,” Hougan wrote in a market note on Tuesday. “One major reason is that crypto is no longer the belle of the ball. AI stocks, robotics companies, SpaceX … who needs crypto when the Nasdaq-100 is up 43% year-over-year?”“With AI sucking all the oxygen out of the room, crypto is being forced to go through a painful metamorphosis: from momentum trade to contrarian bet.”Stocks linked to companies involved in AI have skyrocketed as the technology has captured investor attention after OpenAI launched ChatGPT to the public in late 2022. Shares in Nvidia, which makes computing components key to AI, have gained nearly 1,500% since ChatGPT’s launch.Hougan argued that contrarian bets can be great investments, but their payoff pattern is “usually spotty.”“Momentum investments are fun. They surf along waves of excitement. Contrarian bets, by comparison, are a grind, requiring patience, a long-term orientation, and a focus on fundamentals,” he added.“Investors still believe in crypto, but now that it’s a contrarian bet, they favor fundamentals over vibes.”LVRG Research director Nick Ruck told Cointelegraph that while AI continues to dominate institutional portfolios, “crypto is quietly emerging as the true contrarian bet for sophisticated investors seeking directional upside in a maturing market.” “This shift away from hype toward fundamentals is being fueled by real adoption metrics, regulatory clarity, and on-chain utility rather than speculative bets.” Related: Bitcoin losses by holder cohort hit new highs: Will traders defend $60K?Hougan said that this bear market is different because, unlike past crypto cycles where Bitcoin was the safe haven, money is moving into smaller assets with strong fundamentals such as Hyperliquid, Zcash and Stellar.This is how the contrarian bet is playing out, he said. “When crypto stops being a momentum trade, fundamentals start to matter — and this rotation is proof it’s already underway.”Hougan also argued that it is a sign that we are closer to the end of the bear market than the beginning. “In the heart of a crypto winter, everything’s red. When the green starts to look like real growth, the season is changing.”That bear market end seems a long way off at the moment, with markets dumping a further 5.3% on the day, sending total market capitalization down to $2.38 trillion, 46% below its October peak.Total crypto capitalization tanks to a two-month low. Source: TradingViewMagazine: Big Questions: Do we really only need 2–5 cryptocurrencies?