Key takeaways:

• Bitcoin’s sharp 8% drop triggered $1.5 billion in forced liquidations, ending a tight two-month small-cap correlation.
• Worsening market sentiment was driven by $2.1 billion in Bitcoin ETF outflows and rising fears of a Federal Reserve interest rate hike.

Bitcoin (BTC) faced a sharp 9% drop over 48 hours, hitting the $67,000 support for the first time in two months. This correction wiped out a substantial $176 billion from the total crypto market cap in just two days, triggering $1.5 billion in forced liquidations for overleveraged long positions. 

Traders remain uncertain about the drivers behind crypto’s underperformance, especially since US equities have shown notable strength.

US Russell 2000 small cap equities index (left) vs. Bitcoin/USD. Source: TradingView

The tight correlation between Bitcoin and US small-cap stocks officially broke on May 21 after a solid two-month run. Worsening market sentiment was likely fueled by $2.1 billion in net outflows from US-listed spot Bitcoin ETFs between May 12 and May 20, though derivatives data had already been hinting at a lack of institutional appetite.

Bitcoin 2-month futures basis rate. Source: Laevitas

The annualized BTC futures premium relative to spot markets has held below the neutral 4% threshold for over three months, confirming weak demand for bullish leverage. 

Strategy’s Bitcoin accumulation pause and strength in AI investments

Strategy (MSTR US), led by Michael Saylor, also sparked mixed reactions after it chose to buy back convertible debt while pausing its signature weekly Bitcoin purchases.

Source: X/bjunjo

X user ‘bjunjo’ said that Strategy entered “survival mode for their debt holders and shareholders,” putting aside the sole mission to accumulate more Bitcoin. According to the analysis, the company will do whatever it takes to meet its financial obligations, as shown by a recent BTC 32 sale. Jeff Dorman, Chief Investment Officer at Arca, called the move “a complete balance sheet mismanagement.”

Source: X/ScroogeCap

Meanwhile, X analyst ScroogeCap noted that Google’s (GOOG US) decision to raise equity rather than debt suggests that private equity is effectively dead as liquidity dries up. The analysis highlights that the Oracle (ORCL US) debt-to-equity ratio remains unusually high, while Meta (META US) might be forced to tap more capital due to “irrational spending.” 

Jim Bianco of Bianco Research reportedly said, “We have not seen the market this concentrated around a single theme in 150 years.” Additionally, JPMorgan research found that 41 AI-related stocks account for half of the S&P 500’s market value.

Related: Bitcoin gets new $50K target after BTC price crashes 6% in a day

Interest rate target probabilities for the Sept. FOMC meeting. Source: CME Group

Traders became increasingly risk-averse as the war in Iran showed no sign of imminent relief, explaining the broader sell-off across cryptocurrency markets. US government bonds are now pricing in a 23% probability of the US Federal Reserve hiking interest rates by September, up from 0% just one month prior according to the CME FedWatch Tool.

Ultimately, the cryptocurrency market crash on Tuesday reflects heavy outflows from spot Bitcoin ETFs, an extreme capital concentration in AI investments and a macroeconomic environment signaling stricter monetary policy for longer than the market had previously anticipated.

TLDR:

• Wintermute confirms long-term funds are buying BTC in OTC tranches with an 18-month price outlook.
• BTC and ETH ETFs shed nearly $2B in combined outflows over ten days, the longest streak since launch.
• Wintermute places key BTC downside support between $60,000 and $65,000 amid summer weakness.
• Crypto missed two straight weeks of the equity rally as AI earnings drove rotation into Nasdaq stocks.

Crypto market maker Wintermute reports that long-term funds have begun accumulating Bitcoin through OTC desks in tranches, even as spot prices sit near $72,000.

The firm’s June 1 market update says these buyers see current levels as attractive on an 18-month horizon. The move comes as BTC and ETH ETFs recorded nearly $2 billion in combined outflows over ten days, marking the longest redemption streak since their launch.

BTC OTC Desks Record Quiet Accumulation From Long-Duration Holders

BTC OTC activity is picking up from longer-term oriented funds, Wintermute confirmed in its weekly update. The firm stated that it is “seeing longer-term holders start to TWAP into the market through the OTC desk, with no appetite to call the exact bottom but a view that these levels look attractive on an 18-month basis.”

The move comes in tranches rather than single large orders, a method that avoids moving spot price.

Wintermute placed key downside support between $60,000 and $65,000. That range represents the floor longer-term holders appear to be referencing when sizing their positions.

The firm described the setup as “relatively weak into the summer months” but noted the underlying cycle looks more like a reset than a structural breakdown.

The OTC accumulation stands in contrast to what is happening in the ETF market. BTC spot ETFs recorded approximately $1.4 billion in outflows during the most recent week, extending the longest redemption streak since their launch.

ETH ETFs shed around $240 million over the same period. Between May 20 and May 29, combined BTC and ETH ETF outflows reached nearly $2 billion.

Strategy, the largest corporate Bitcoin holder, began selling during this window as well. That development added to bearish sentiment across crypto-native circles.

Wintermute noted that “the bid that carried BTC from $70k to $80k in April is gone,” with the marginal dollar now sitting in Nvidia, Dell, and small-cap equities instead.

Crypto Sits Out the Equity Rally as Macro Pressure Persists

Wintermute noted that crypto has now missed two consecutive weeks of the broader risk-asset rally. The firm said “the risk-on rotation went into Nasdaq and the Russell 2k” while crypto, described as “the most risk-sensitive cross-asset class, got skipped.” The S&P 500 logged its ninth straight green week, gaining 1.9%, while the Nasdaq rose 8% on the month.

The macro backdrop explains part of the divergence. April PCE printed at 3.8% headline, with core rising to 3.3%. The bond market is pricing a 35–40% probability of a rate hike before year-end.

Wintermute flagged that “it’s not unthinkable to see stagflation and double dip inflation pop up again in Q3,” particularly with AI-driven demand keeping the broader economy hot.

Equities are climbing through that backdrop on the strength of an AI earnings story. Wintermute observed that “equities aren’t rallying because the macro improved — they’re rallying because AI earnings keep printing and the market is choosing to look through everything else.” Crypto has no equivalent narrative, leaving it fully exposed to the same headwinds the equity market is bypassing.

Near-term catalysts include Wednesday’s CPI and PPI data and the Monday launch of CME Nasdaq crypto index futures.

Wintermute identified ETF flows as the key metric to watch, noting that “sustained inflows marked the institutional return in April” and that their continued absence is “what’s keeping spot heavy.”

Strive Asset Management (ASST) has acquired 2,500 bitcoin for roughly $185.2 million at an average price of $74,092 per coin, between May 23 and June 1, the company reported in an 8-K filing released Tuesday.

The new purchase was at a lower average price than Strive’s last disclosed acquisition of 1,109 BTC at $76,989 on May 22, suggesting the company bought into the dip that has taken bitcoin from above $74,000 last week to roughly $70,800 by Tuesday morning, per CoinDesk data.

Strive disclosed its quarter-to-date BTC yield at 23.0% and year-to-date yield at 36.7%, metrics that measure growth in bitcoin holdings on a per-share basis after accounting for dilution from new share issuance. The company also reported an amplification ratio of 57.0%, indicating shareholders’ bitcoin exposure grew faster than bitcoin’s underlying price appreciation. The company said it also raised cash reserves to maintain an 18-month dividend reserve.

The purchase lifts its total holdings to 19,000 BTC, data shows, and pushes the bitcoin treasury company further into the top 10 of publicly traded corporate holders.

The filing comes as its peer, and the largest corporate bitcoin holder, Strategy (MSTR), disclosed its first publicized sale of 32 bitcoin for $2.5 million at an average price of $77,135 on Monday, sparking a selloff in BTC and the broader crypto market since.

Meanwhile, Benchmark analyst Mark Palmer initiated coverage on Strive with a Buy rating and a $32 price target on Tuesday, implying roughly 93% upside even after the company’s Class A shares fell 3.59% to $16.58 in pre-market trading.

TLDR:

• The CFTC approved the first perpetual futures contract on a US regulated venue on May 29, 2025.
• Perpetual futures use a funding rate mechanism to keep contract prices aligned with the spot market.
• Regulated platforms Kalshi and Polymarket stand to benefit from the CFTC’s new regulatory framework.
• The approval marks a step toward DeFi platforms like Hyperliquid gaining access to US-based users.

The CFTC perpetual futures approval on May 29 marks a turning point for US derivatives markets. For the first time, a perpetual futures contract has received regulatory clearance on a domestic venue.

The move follows crypto’s growing influence on traditional finance, after stablecoins and tokenized assets led the way. It also opens a path for decentralized platforms like Hyperliquid to eventually reach American users.

Crypto Exports Another Innovation to Traditional Finance

The digital assets industry has steadily introduced new financial instruments to mainstream markets. Stablecoins were the first major export, offering dollar-pegged utility across global payment rails.

Tokenized assets followed, bringing real-world value onto blockchain infrastructure. Now, perpetual futures complete a third wave of crypto-native innovation entering regulated finance.

Grayscale noted the progression in a post on X, pointing to the CFTC approval as a continuation of that trend. The firm described it as another step in DeFi platforms reaching US users over time.

This framing places the CFTC decision within a broader structural shift, not just a regulatory footnote. Traditional finance is increasingly drawing from a crypto playbook built over the last decade.

The approval also benefits regulated US platforms operating in prediction and derivatives markets. Kalshi and Polymarket stand to gain from clearer regulatory footing under this framework.

Additionally, the CFTC provided guidance allowing Coinbase Financial Markets to offer access through a Foreign Futures framework. That guidance further broadens the scope of who can participate under US oversight.

The timing of this approval aligns with a more open regulatory environment in Washington. Regulators have shifted toward engagement rather than enforcement in recent months.

As a result, market participants are now better positioned to structure compliant perpetual futures products. That shift creates room for more instruments to move from crypto-native venues into mainstream trading infrastructure.

How Perpetual Futures Work and Why They Matter

Unlike traditional futures, perpetual futures carry no expiration date and require no physical delivery. That structure makes them more flexible for traders seeking continuous exposure to an asset or price index.

They function similarly to total return swaps in traditional finance. The key difference is the funding rate mechanism that keeps contract prices anchored to the spot market.

The funding rate involves periodic payments exchanged between long and short position holders. When the futures price rises above spot, longs pay shorts to discourage further premium.

When it falls below, shorts pay longs to close the discount gap. The larger the price divergence, the bigger the payment in either direction.

This mechanism creates a built-in correction system without requiring contract settlement. It keeps market prices honest while allowing open-ended exposure for participants.

Traders can hold positions indefinitely, adjusting based on funding costs rather than expiry calendars. That flexibility has made perp futures the dominant derivative product across crypto markets globally.

The CFTC’s move now brings that structure into a compliant US framework for the first time. It sets a precedent for how crypto-native instruments can be adapted for regulated domestic venues.

Over time, it may also ease the path for DeFi-native platforms to extend services to US-based users. The approval is a structural development with long-term reach across both crypto and traditional finance markets.

The U.S. Treasury Department blacklisted several Iranian crypto exchanges, including its largest platform Nobitex, on Tuesday as part of its ongoing campaign against the Iranian government.

The Treasury’s Office of Foreign Asset Control announced that Nobitex, Wallex, Bitpin and Ramzinex, as well as some of these exchanges’ executives, were being added to its global Specially Designated Nationals list, barring any U.S. entities or businesses and people who use the U.S. dollar financial system from providing any financial services with the platforms.

The announcement came just days after Treasury Secretary Scott Bessent announced that his department had seized around $1 billion in crypto from Iranian exchanges and wallets since the beginning of the war against Iran.

“While Iran’s economy is in free fall, the regime has chosen to co-opt digital asset technologies for its own corrupt agenda, including evading sanctions and transferring wealth out of the country. Iran’s current economic chaos is proof that President Trump’s maximum pressure campaign has been a success,” Bessent said in a statement on Tuesday.

The announcement linked Tuesday’s action to Nobitex’s alleged association with “Iran’s terrorist activities, sanctions evasion efforts and Islamic Revolutionary Guard Corps (IRGC)-linked transactions,” which included ransomware payments.

Nobitex also helped move assets out of Iran after the U.S. began bombing it earlier this year, the press release said.

The Treasury Department said the sanctions actions were part of its broader campaign against Iran.

“Additionally, Treasury recently warned of the sanctions risk associated with complying with Iranian demands for passage through the Strait of Hormuz, such as “toll” payments, including payments made via fiat currency, digital assets, offsets, informal swaps, or other in-kind payments such as nominally charitable donations, and providing sensitive vessel information,” the press release said.

Read more: U.S. says it seized about $1 billion in Iranian crypto as pressure campaign expands

TLDR

• The U.S. Treasury sanctioned Nobitex, which it described as Iran’s largest digital asset exchange.
• According to the Treasury, Nobitex handled more than half of Iranian digital asset inflows in 2025.
• OFAC alleged that Nobitex supported sanctions evasion, stablecoin transfers, and IRGC-linked crypto transactions.
• Treasury also designated Amir Hossein Rad and other Nobitex leaders in the sanctions action.
• The action forms part of the Economic Fury campaign targeting Iran-linked financial and digital asset networks.

The U.S. Treasury moved against Iran’s largest digital asset exchange, Nobitex, in a new sanctions action on Tuesday. The action targets alleged terror finance, sanctions evasion, and regime-linked crypto flows.

Treasury Targets Nobitex and Iranian Crypto Exchanges

According to the Department of the Treasury, OFAC designated Nobitex under counterterrorism and Iran financial-sector authorities. The release also named three other Iranian digital asset exchanges in the action. Treasury described Nobitex as Iran’s largest digital asset exchange. It also alleged that the platform handled more than half of Iranian digital asset inflows in 2025.

According to the release, Nobitex supported payments tied to Iran’s sanctioned activities and IRGC-linked transactions. Treasury also linked some activity to wallets associated with IRGC-affiliated ransomware actors.

The department also designated Amir Hossein Rad, Nobitex’s chairman, co-founder, and former chief executive. Treasury stated that other Nobitex leaders and officials also faced sanctions. Treasury Secretary Scott Bessent connected the action to the Trump administration’s Iran policy. “Treasury will continue to follow the money,” Bessent stated in the release.

OFAC Alleges Stablecoin Use and Sanctions Evasion

According to the Treasury, Nobitex helped the Central Bank of Iran access hundreds of millions of dollars in stablecoins. The department alleged those funds supported efforts tied to the falling value of the Iranian rial. The release also claimed that Nobitex helped regime insiders reach international digital asset exchanges. Treasury framed that activity as part of sanctions evasion across several jurisdictions.

According to OFAC, Nobitex acted as a vehicle for sanctions evasion through its earlier Central Bank links. The department also alleged that the platform contributed to repression inside Iran. Treasury claimed the exchange enabled the Iranian government to conduct warrantless surveillance of civilians.

Additionally, the release stated that two Nobitex co-founders had close links to Khamenei’s family. The department cited Executive Order 13224, as amended, in its Nobitex designation. It also cited Executive Order 13902, which covers Iran’s financial sector.

Economic Fury Expands Pressure on Iran

The sanctions form part of the Economic Fury and maximum pressure policy. The department stated that the campaign targets Iran’s ability to generate, move, and repatriate funds. Treasury reported that its actions have blocked access to tens of billions of dollars for Iran-linked networks. It also referenced actions that froze nearly half a billion dollars in regime-linked cryptocurrency.

The release stated that Treasury has targeted shadow banking networks, oil channels, military supply networks, and proxy groups. It also warned foreign companies against supporting illicit Iranian commerce. The administration now targets both traditional sanctions evasion and digital asset exploitation. The department also raised the possibility of secondary sanctions on foreign financial institutions.

Treasury also warned about payments tied to passage through the Strait of Hormuz. It listed fiat currency, digital assets, offsets, swaps, and in-kind payments among possible sanctions risks. On May 27, the Treasury designated Iran’s so-called Persian Gulf Strait Authority. The department described it as an IRGC-linked scheme tied to shipping through the Strait of Hormuz.

The release also stated that Nobitex played a role after U.S. combat operations in Iran began. Treasury alleged that the platform helped protect and move assets despite internet blackouts. According to OFAC, the action targets persons who materially assisted or supported the IRGC. The department also stated that Nobitex operated in Iran’s financial sector.