• Bitcoin remains under pressure as expectations of higher U.S. interest rates weigh on sentiment.
  • Reports that Strategy may sell Bitcoin to raise cash add to selling pressure, despite previous comments from Michael Saylor.
  • Capital continues to rotate from crypto into AI and semiconductor stocks, according to analysts.

Bitcoin extended its decline on Thursday, sliding below $70,000 for the first time in two weeks, as persistent expectations of higher U.S. interest rates dampened risk appetite. The largest cryptocurrency fell 3.2% to $68,500 as of 2 p.m. in New York, extending its weekly loss to nearly 8%. The move comes as traders reassess the likelihood of Federal Reserve rate cuts this year, with stronger-than-expected economic data pushing back expectations for easing.

Adding to the pressure, reports emerged that Michael Saylor's Strategy, a corporate vehicle that holds a significant Bitcoin stash, may be considering selling some of its holdings to raise cash. The news surprised investors, given Saylor's longstanding bullish stance on Bitcoin and his previous statements that the company would never sell. According to people familiar with the matter, the potential sale is part of a broader cash-management strategy, though the timing and size remain unclear. A representative for Strategy declined to comment.

The dual headwinds have prompted a shift in investor sentiment, with capital flowing out of crypto and into AI and semiconductor stocks, which have been on a tear this year. 'We're seeing a clear rotation,' said a market analyst at a major bank. 'Investors are chasing momentum in AI and tech, while crypto faces macro and idiosyncratic risks.'

The broader crypto market followed Bitcoin lower, with Ether falling 4% and smaller tokens posting steeper declines. The selloff comes ahead of next week's Federal Open Market Committee meeting, where policymakers are expected to hold rates steady but could signal a more hawkish stance. Bitcoin's retreat has also been exacerbated by outflows from spot Bitcoin ETFs, which have seen net redemptions of $1.2 billion over the past week.

Despite the near-term pessimism, some analysts note that the fundamentals for Bitcoin remain intact, with growing institutional adoption and a more favorable regulatory backdrop. 'This is a macro-driven pullback, not a structural change,' said a crypto fund manager. 'If rates stabilize, Bitcoin could bounce back quickly.' However, the potential Strategy sale adds an element of uncertainty that could keep a lid on prices in the near term.

Update: A later report from a crypto news outlet, citing anonymous sources, suggested that Strategy's potential sale is exploratory and may not materialize. Bitcoin pared some losses following the report, trading back above $69,000.