Note: Data and analysis in this report are current as of 25 June 2026 and do not reflect any subsequent market developments.

Executive Summary

Following the recovery observed through April, May opened with continued constructive momentum before stalling in the second half of the month. Bitcoin reached a period high breaking $80,000 on May 15, supported by on-chain indicators that some analysts viewed favourably, before institutional flows reversed.

June proved more challenging. A combination of factors, including a record-length exchange-traded fund (ETF) outflow streak, a high-profile disclosure regarding corporate Bitcoin holdings, a large wallet movement linked to a historical exchange collapse, and stalled diplomatic talks, contributed to a sharp early-month drawdown. Conditions were compounded later in June when the U.S. Federal Reserve, under newly installed Chair Kevin Warsh, held interest rates steady but revised its forward projections in a more hawkish direction, removing near-term rate-cut expectations that parts of the market had been pricing in.

By the final week of June, Bitcoin traded in the $59,000–$63,000 range, a level not seen since 2024. The Crypto Fear & Greed Index moved deep into 'Extreme Fear' territory during this period. Four themes characterised May–June:

• A brief mid-May rally followed by a record-length Bitcoin ETF outflow streak

• A widely discussed but small-scale corporate Bitcoin disposal in late May/early June

• A leadership transition at the U.S. Federal Reserve and a subsequent hawkish policy shift

• Continued, but unresolved, progress on U.S. digital asset legislation (the CLARITY Act)

1. Market Conditions Entering May

Bitcoin entered May continuing the recovery trend observed through April, supported by several technical indicators that market analysts described as constructive. Reports at the time noted that Bitcoin had moved above certain on-chain cost-basis levels, that futures funding rates had shifted from negative to neutral (suggesting reduced short-side pressure), and that options market positioning appeared supportive of further gains. Some analysts cited these as signals consistent with continued upside, though such signals are observational rather than predictive, and outcomes are not guaranteed.

Bitcoin broke $80,000 on May 15, 2026, the highest level of the two-month period, before momentum began to fade in the second half of the month.

2. May: Momentum Fades

Price Action

Bitcoin traded in a broad range through May, moving from the low-$78,000s at the start of the month to breaking $80,000 mid-month, before drifting lower to the $73,000–$77,000 range by month-end. The move lower coincided with a shift in institutional fund flows.

ETF Flow Reversal

Beginning around May 15, U.S. spot Bitcoin ETFs entered what several data providers described as their longest sustained outflow streak since the products launched in January 2024. Reported figures varied modestly by source, with estimates of net outflows over this stretch ranging from approximately $2.8 billion to $3.5 billion across roughly ten consecutive trading sessions through late May. This marked a reversal from the consistent inflow pattern observed in preceding months and, according to some market commentary, reflected profit-taking by holders who had established positions at lower prices earlier in the year, rather than necessarily indicating a change in the underlying long-term investment thesis. This interpretation is one view among several, and outcomes going forward remain uncertain.

U.S. Regulatory Developments

On May 14, 2026, the U.S. Senate Banking Committee advanced the Digital Asset Market Clarity Act (the 'CLARITY Act') by a vote of 15–9, with two Democratic senators joining Republican committee members. The committee vote represented a procedural step rather than final passage; the bill still required reconciliation with a separate Senate Agriculture Committee draft, a full Senate floor vote requiring 60 votes, reconciliation with the House-passed version, and presidential signature before it could become law in the United States. Some senators who voted to advance the bill in committee indicated their support was not guaranteed at the floor-vote stage.

Separately, spot Solana exchange-traded funds began trading in the U.S. on May 26, 2026, becoming the third major digital asset (after Bitcoin and Ethereum) to receive this form of regulated investment product access in that jurisdiction.

Leadership Transition at the U.S. Federal Reserve

Kevin Warsh was sworn in as Chair of the U.S. Federal Reserve on May 22, 2026, following a 54–45 Senate confirmation vote, succeeding Jerome Powell. The appointment was closely watched by crypto market participants given Mr. Warsh's previously disclosed personal holdings across a range of digital assets, though his policy approach as Chair was, at this stage, not yet established.

3. June: Macro-Driven Volatility

Early-Month Drawdown

On June 1, 2026, a regulatory filing disclosed that Strategy (formerly MicroStrategy) had sold 32 BTC between May 26 and May 31 for approximately $2.5 million, at an average price of $77,135 per coin. The proceeds were reported to be allocated toward funding distributions on the company's preferred stock. The transaction represented a small fraction (less than 0.01%) of the company's total holdings of over 843,000 BTC, and the company reportedly made a larger Bitcoin purchase shortly afterward. Market commentary was divided on the significance of the disclosure: some characterised it as a routine balance-sheet management decision, while others noted it represented the company's first disclosed net reduction in Bitcoin holdings in approximately four years and that the announcement coincided with a broader period of negative sentiment.

The disclosure coincided with several other developments in early June, including continued heavy U.S. spot Bitcoin ETF outflows (reported in the range of $2.8–$3.5 billion for the week), a reported $739 million transfer from a wallet address associated with the historical Mt. Gox exchange collapse, and reports that U.S.–Iran diplomatic talks had stalled, which contributed to renewed energy-price pressure. Bitcoin fell from an intraweek high near $75,850 to an intraday low of approximately $65,710 on June 3, 2026, a decline of roughly 12% over the week. Total liquidations across leveraged crypto derivatives positions were reported at approximately $1.8 billion within a single day, with some estimates of cumulative liquidations across the broader sell-off reaching approximately $7 billion and an estimated $390 billion reduction in total crypto market value. Multiple sources described this as among the most significant weekly drawdowns since November 2022.

Brief Stabilisation

The U.S. spot Bitcoin ETF outflow streak, which by various estimates extended across approximately 13 consecutive trading sessions from mid-May through June 3 (with total net outflows estimated at $4.3–$4.4 billion for that window), paused on June 5, 2026, with a modest net inflow of approximately $3 million. Spot Ethereum ETFs concluded a separate, concurrent 17-day outflow streak on the same day. Flows showed further signs of stabilisation by June 12, when U.S. spot Bitcoin ETFs recorded approximately $85.9 million in net inflows with no individual fund reporting outflows that session.

Federal Reserve Policy Decision (June 17)

On June 17, 2026, the Federal Open Market Committee held its policy rate steady at 3.50%–3.75% in a unanimous 12–0 vote, the fourth consecutive meeting without a change and a widely anticipated outcome. The more market-relevant development was a revision to the Committee's quarterly economic projections: the median year-end 2026 rate projection rose to 3.8% from 3.4% in March, with nine of eighteen officials projecting at least one rate increase before year-end, compared to zero officials projecting a hike as of the March meeting. Chair Warsh also declined to submit a personal rate projection and indicated the Committee would rely more heavily on incoming data rather than providing forward guidance, a departure from recent practice.

Market reaction was swift. Various reports estimated approximately $2 trillion in combined paper losses across equities, gold, silver, and crypto markets within a short window following the announcement. Bitcoin fell from levels near $66,000 ahead of the meeting to a range of approximately $64,000–$66,000 in the hours following, with most major cryptocurrencies reported down between 1% and 3% on the day. Commentary attributed the reaction less to the rate hold itself, which had been broadly anticipated, and more to the shift in forward-looking guidance, which had implications for prior assumptions regarding the pace of future U.S. monetary easing. As with any policy outlook, these projections are subject to change at subsequent meetings, with the next scheduled FOMC meeting on July 28–29, 2026.

Continued Decline Into Month-End

Conditions remained pressured through the remainder of June. Some sources reported a liquidation cascade in which Bitcoin fell from approximately $67,000 to around $59,100 within a 48-hour window, with cumulative derivatives liquidations across the broader market reported above $3 billion during that stretch. The Crypto Fear & Greed Index was reported in the 'Extreme Fear' range (with various single-day readings between approximately 9 and 24) through the final two weeks of the month. By June 25, 2026, Bitcoin traded below $60,000, a level some reports characterised as the lowest since 2024, with Ethereum trading near $1,560–$1,620 over the same period. Commentary attributed the continued weakness to a combination of factors, including sustained ETF outflows, uncertainty regarding the CLARITY Act's legislative timeline, and reported capital rotation toward other asset classes, including AI-related equities. As with all market commentary, these attributions reflect contemporaneous analyst views rather than confirmed causal relationships.

4. U.S. Regulatory Landscape: The CLARITY Act

Progress on the Digital Asset Market Clarity Act (CLARITY Act) continued through May and June in the United States, though a number of procedural and political obstacles remained unresolved by month-end.

1. May 14: The Senate Banking Committee advanced the bill 15–9 in a formal markup vote.

2. June 1: A revised version of the Senate Banking bill was published, and the CLARITY Act was placed on the Senate Legislative Calendar, making it formally eligible for full floor consideration.

3. June 9: Closed-door negotiations among a bipartisan group of senators on outstanding ethics-related provisions reportedly broke down without agreement, introducing renewed uncertainty regarding the bill's near-term prospects.

Industry commentary, including analysis from financial-sector policy strategists, suggested that the bill would likely need to clear the full Senate by the end of July (and preferably in June) for 2026 passage to remain realistic, noting that prospects could deteriorate materially if it did not advance before the Senate's August recess, with the approaching November 2026 midterm elections cited as an additional factor narrowing the legislative window. As with any pending legislation, the ultimate outcome and timing remain uncertain, and the bill would still require House reconciliation and presidential signature to take effect in the United States. It is important to note that any resulting framework, if enacted, would apply specifically within the U.S. jurisdiction and would not necessarily extend to or alter regulatory treatment of digital assets in other markets.

5. Asset-Level Observations

Price action across major digital assets was broadly negative through May and June, though the scale of declines and the pattern of institutional product flows varied meaningfully by asset.

Ethereum: Upgrade Timeline Extends

Ethereum's price came under pressure through the period, with some reports placing ETH below $1,600 by late June, a substantial retracement from its August 2025 all-time high. Spot Ethereum ETFs experienced a 17-day net outflow streak that concluded on June 5. Separately, the Ethereum Foundation's planned 'Glamsterdam' protocol upgrade, which had been informally targeted for around June 2026, was reported by multiple sources to have shifted toward a second-half-2026 timeline, with some technical commentary attributing the delay to the broader scope of changes under consideration relative to prior upgrades. Network upgrade timelines in open-source software development are subject to change, and a revised target date is not a guarantee of delivery by that date.

XRP and Solana: Relative ETF Resilience

Despite broader market weakness, U.S. spot XRP and Solana ETFs reported comparatively steadier, though modest, net inflows during parts of this period, with some data providers noting that XRP ETFs recorded positive weekly inflows even during weeks when Bitcoin and Ethereum funds reported net outflows. Analysts offered differing explanations for this pattern, including the relatively smaller size of these newer product categories and continued interest tied to the March 2026 U.S. digital-commodity classification of XRP. The smaller scale of these fund categories relative to Bitcoin and Ethereum ETFs means that flow patterns in this period should be interpreted with appropriate caution regarding their durability.

6. Macro Environment

Monetary Policy

The dominant macro theme of the period was the transition in leadership at the U.S. Federal Reserve and the associated shift in policy outlook described in Section 3. The Committee's June 2026 projections also included an upward revision to its 2026 inflation forecast (with the projected Personal Consumption Expenditures, or PCE, inflation figure raised to 3.6% from 2.7% in March) and a downward revision to its 2026 GDP growth forecast (to 2.2% from 2.4%). U.S. Treasury yields moved higher following the meeting, which market commentary generally associated with reduced near-term appeal of non-yielding or speculative assets, including certain digital assets, relative to fixed-income alternatives. These dynamics are specific to U.S. monetary policy and may not directly correspond to conditions in other jurisdictions.

Geopolitical Factors

Reports of stalled diplomatic talks between the U.S. and Iran in early June were cited by multiple sources as a contributing factor to renewed energy-price pressure and broader risk-asset weakness during that period, reversing some of the relief observed following the earlier ceasefire developments referenced in prior coverage of this market.

7. Market Structure: Liquidation Data

Elevated and recurring liquidation events through this period are consistent with markets that retain meaningful leveraged positioning. Such events can occur in either direction and do not, on their own, indicate the future direction of prices.

8. Market Perspectives: Differing Interpretations

As with prior periods, market participants and analysts held differing views on how to interpret the May–June price action. The table below summarises commonly cited considerations on each side; it is not exhaustive and is not intended as a recommendation.

Market participants remain divided on whether the May–June price action reflects a cyclical consolidation within a longer-term trend or a more structural shift in conditions. Both interpretations have been advanced by credible market commentators, and this material does not seek to resolve that debate. Individuals should weigh these considerations against their own risk tolerance and financial circumstances, and are encouraged to seek independent advice where appropriate.

9. Monitoring Pointers

Themes Cited for Continued Monitoring

• The outcome and timing of the U.S. CLARITY Act, including resolution of outstanding ethics provisions

• Developments at the July 28–29, 2026 Federal Reserve meeting and any further guidance from Chair Warsh

• Whether U.S. spot ETF flows stabilise or extend recent outflow trends

• The revised timeline for Ethereum's Glamsterdam upgrade

• Broader macro and geopolitical developments, including energy prices and inflation data

• Reported capital rotation between digital assets and other asset classes

Bottom Line

May and June 2026 marked a transition from the cautious recovery observed earlier in the year to renewed weakness, driven primarily by a reversal in institutional ETF flows and a shift in U.S. monetary policy guidance. Bitcoin moved from a period high near $80,000 in mid-May to levels below $60,000 by late June. Regulatory progress on the CLARITY Act continued in the U.S. Senate but remained unresolved, leaving an important source of structural clarity still pending.

Whether this period represents a deeper, sustained correction or a temporary setback within a longer-term trend remains an open question among market participants, and this material does not offer a view on that question. As always, digital asset markets remain subject to significant volatility, and conditions can change quickly based on macroeconomic, regulatory, and market-structure developments.