Bitcoin's decline continued on Wednesday, as a small sale by a major corporate holder unsettled market sentiment and further separated the digital asset's performance from that of record-setting technology stocks.

The leading cryptocurrency dropped as much as 3.1% to $65,391, extending a weekly slide that has erased approximately $160 billion in market value. The downturn was triggered earlier in the week when Strategy Inc. sold a portion of its vast Bitcoin reserves, valued at over $60 billion, for about $2.5 million.

While the sale was minuscule in financial terms—just 32 tokens from a stockpile of 843,706—it damaged market confidence in Chairman Michael Saylor's longstanding "never sell" philosophy, according to Rajiv Sawhney of Wave Digital Assets.

"The financial impact of Strategy selling 32 BTC is negligible, a mere rounding error against its $62 billion position," Sawhney stated. "The signal it sends to the market, especially given Bitcoin's recent underperformance, carries far greater weight."

This cryptocurrency weakness stands in stark contrast to the ongoing rally in equities. The Nasdaq 100 Index reached a new record high on Tuesday, highlighting a growing performance gap between Bitcoin and tech stocks. Once considered a high-beta proxy for the tech sector, Bitcoin's correlation has diminished since a market downturn in October of last year.

The shift has been particularly pronounced as capital flows into artificial intelligence stocks. Over the past 12 months, the Nasdaq 100 has surged 41.5%, while Bitcoin has fallen 37% and remains 48% below last year's high.

"We have been moving some capital from Bitcoin and digital assets into AI equities," noted Carney Mak, a partner at FXHB Asset Management. "AI currently presents a more attractive risk-reward proposition compared to digital assets, prompting some investors to adjust their portfolio allocations."

Mak added that the crypto sector currently lacks a strong short-term catalyst, with its performance becoming more range-bound and reliant on broader liquidity and macroeconomic factors. He pointed out that some crypto-related IPO plans have been postponed, while AI companies continue to attract strong investor interest and market momentum.

In a related move, Nasdaq-listed K Wave Media announced last month it would scrap plans to invest around $500 million in Bitcoin, redirecting most of that capital toward AI data centers, GPU infrastructure, and related acquisitions. Separately, crypto miner Bitdeer liquidated its entire Bitcoin treasury to fund an expansion into AI and high-performance computing.

ETF Withdrawals Intensify

The selling pressure is also evident in fund flows and derivatives markets. Data shows investors have withdrawn nearly $4 billion from U.S.-listed Bitcoin exchange-traded funds over 12 consecutive sessions—a record streak of outflows. Additionally, approximately $1.6 billion in bullish perpetual futures positions have been liquidated over the past day.

For a market partially built on the belief that its largest holders would continue accumulating, Strategy's minor sale has assumed disproportionate significance. The key question is whether this action has altered the market psychology supporting one of the token's fundamental bullish narratives.

There is further concern that the pressure on Strategy may not be limited to its own stock, which is down 14% this week and over 70% from its peak.

Pratik Kala of Apollo Crypto warned that leveraged and income funds tied to Strategy's stock, such as MSTU, MSTY, and MSTX, could experience heightened volatility if investors begin doubting the sustainability of the company's accumulation strategy. As these financial products are designed to amplify daily moves in MSTR stock, even a slight erosion in confidence could lead to disproportionate losses and forced portfolio adjustments.

"It's a vicious cycle," Kala explained. "The drop in MSTR is affecting the ETFs built around it, including MSTY, MSTU, and MSTX. As losses accumulate, investors pull money from those funds, which further worsens sentiment toward the broader MSTR investment theme."