Nasdaq Tumbles 7.5% as Bitcoin Fails to Hedge Market Turmoil
By John Nada·Jun 12, 2026·3 min read
Nasdaq dropped 7.5%, losing $2.7 trillion. Bitcoin ETFs see $1.9B outflows, failing to hedge market turmoil.
Massive spot Bitcoin ETF outflows in June show the cryptocurrency is currently failing to act as a stock market hedge, according to Cointelegraph.
The financial markets have been under considerable pressure recently, as evidenced by a significant decline in the Nasdaq 100 Index, which fell by 7.5% in the seven days leading up to June 10. This sharp decline resulted in a staggering loss of $2.7 trillion in market value, a figure that surpasses twice the entire market capitalization of Bitcoin. These developments have understandably put traders on high alert, particularly as inflation data continues to be adversely impacted by rising oil prices.
The price of Brent crude oil has been driven above $90, primarily due to the ongoing geopolitical tensions related to the war in Iran. This development has fueled investor fears of an impending economic slowdown and has led to expectations of a prolonged period of stricter monetary policy from the US Federal Reserve. Despite a robust job market, the funds available for consumer spending are seen to be diminishing, adding to the economic concerns.
According to the US Labor Department, the producer price index saw a significant jump of 6.5% from May 2025, marking the highest level recorded since 2022. This has led traders to anticipate a 40% probability of an interest rate hike by the US Federal Reserve by September, a substantial increase from the 5% probability recorded just a month earlier, as reported by the CME FedWatch Tool.
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In the cryptocurrency market, Bitcoin futures contracts traded below the 4% neutral premium relative to regular spot markets on Thursday, a clear indication of low demand for bullish leverage. This lack of demand is juxtaposed with the upcoming $75 billion initial public offering (IPO) of SpaceX, which was oversubscribed by more than twofold, suggesting that investors have not yet abandoned their optimism for growth in the tech sector.
The tech industry, particularly AI infrastructure companies such as Google, Oracle, and Super Micro Computer, is in dire need of capital to support their expansion efforts. Google has announced plans to raise $80 billion, while Oracle and Super Micro Computer are targeting $40 billion and $7 billion, respectively. The debut of SpaceX shares on Friday is expected to establish the precedent for future IPOs in the sector.
Amid the ongoing turmoil in the tech sector, it seems premature to label the AI sector as a bubble. This is especially true following SpaceX’s historic IPO, which valued the company at $1.77 trillion. Furthermore, the US stock market responded positively when President Donald Trump announced the cancellation of planned military strikes on Iran, citing renewed diplomatic efforts to reopen the Strait of Hormuz.
Bitcoin’s recent decline coincided with Strategy's decision to temporarily pause its Bitcoin accumulation strategy in order to reduce convertible debt. As a result, Strategy's cash reserves have diminished to cover only seven months of dividend payments, while its preferred variable Stretch shares have moved further away from the $100 threshold necessary for equity issuance.
The $1.9 billion in outflows from spot Bitcoin exchange-traded funds (ETFs) in June has reinforced a bearish sentiment, serving as a proxy for institutional demand. As it stands, Bitcoin is struggling to be seen as a viable hedge against a stock market sell-off, and the possibility of its value falling below $60,000 remains a significant concern.