On Thursday, data released by the U.S. Bureau of Labor Statistics showed that headline inflation in May 2026 climbed to 4.1 percent, shooting beyond 4 percent for the first time in 3 years. The impact on Bitcoin was immediate, as it briefly slid below the $58,200 level.
Hot inflation hammers Bitcoin
Experts attribute the higher-than-expected inflation print to the Middle East conflict which led to an increase in oil prices around the world. However, on Thursday, oil prices fell to pre-war level, suggesting that inflation likely peaked in May and is expected to come down in June.
That said, the downward impact on inflation could be limited due to the rising prices for technology components such as semiconductors and electronics amid an AI investment boom.
According to Coingecko data, the whole crypto market saw a sharp pullback. The total crypto market cap fell from slightly more than $2.18 trillion, to as low as $2.09 trillion within minutes.
Bitcoin fell to its lowest level in 2026 as it hit $58,115 on Binance crypto exchange. The top cryptocurrency had last traded at this price level way back in September 2024.
Data from Coinglass shows that liquidations over the past 24 hours topped $994 million, with BTC long positions contributing around $479.25 million to the total. Exchange-wise, Binance led with liquidations worth $442 million, of which $318 million were long positions.
Exchange-traded fund (ETF) data also signalled stress on BTC products. According to data from SoSoValue, U.S. spot BTC ETFs saw net outflows worth $469 million on Wednesday. Notably, spot BTC ETFs have now seen 5 consecutive days of net outflows.
Negative impact on Strategy’s stock
The largest corporate holder of Bitcoin by far, Strategy, saw its stock MSTR take a major hit after the release of inflation data. The stock tends to track BTC’s price, and crumbled around 4.5 percent in the early hours of Thursday, falling to $87.
Similarly, Strategy’s Variable Rate Series A Perpetual Stretch Preferred Stock (STRC) fell to $74, significantly below its par value of $100. The Michael Saylor-led company is now sitting on an unrealized paper loss of roughly $13.5 billion on its BTC holdings.
Despite the slump in BTC price, Strategy remains unfazed as it keeps accumulating the digital asset. On Monday, Strategy raised $335 million through share sales, adding another 520 BTC to its balance sheet.
