🫨 Bitcoin dips below $80K.

PLUS: Harvard cuts Bitcoin ETF stake, exits ETH

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Cryptopolitan News
May 18, 2026 • Estimated Reading Time: 4 minutes

Bitcoin suffered its worst day in February .The headline is the liquidations, the bond market is where the action really is.

It was stop run Monday morning in Asia. No major headline. No single piece of news. This run on Bitcoin only started falling with $77,000 - and shortly after the dominoes fell. Almost $500 million were force-closed in leverage long positions within a span of 15 mins. The final count was $563 million in long force liquidations compared with just $65 million in shorts by the end of day. Everything about how crowded the bullish trade had become going into this week is in that lopsided ratio.

Sean McNulty at FalconX felt it was appropriate to call out: "A stop run with no macro headlines and the downside hedging from last week" Translation: the market was in tatters even before Monday. Monday just found the crack.

Why the market was fragile

Last week, the 30-year US Treasury yield finished up at 5.13%. That is the highest since 2007. Yields across the 10-year and 2-year are at a record 12-month highs. Holding a volatile asset with no payout becomes much more difficult to articulate out loud in an invest-ment committee when you can make 5% coupon yield on a government bond that matures in thirty years.

Bitcoin has been trying to rally in this environment And truthfully, that it got to $82,000 a week ago is demonstrative of the actual demand underneath. However, it gets unwound too when a risk-free rate is doing what it is currently.

There will be no Fed bail out coming this year. Traders on Polymarket put no rate cut in June at 98%. July sits at 94%. Scheduled for Wednesday: The FOMC minutes from Powell's last meeting as Fed chair. If hikes were back on the table, as three members had indicated, a risk market reaction isn't going to be pretty.

The ETF picture got messy

Net outflows from spot Bitcoin ETFs last week. A total of $1.039 billion was seen, which followed the preceding phase of positive flows for six consecutive weeks. Likewise, Ethereum ETFs saw another $255 million flow out this week. Combined institutional exit in the same week exceeds $1.3 billion.

What is also interesting is the break down of Bitcoin ETFs. Specifically from ARK-linked products, over 4,000 BTC flowed out. If anything, ARK has brought a different type of investor than BlackRock's IBIT - much closer to retail, and as momentum-sensitive. When ARK holders back away from such pools, it is often a harbinger of a different turn in sentiment.

The part the headlines missed

It gets a little more complicated from here. Meanwhile, long-term Bitcoin holders were quietly doing the opposite.

Long-term holder supply hit 15.26 million BTC this month, the highest level seen since August 2025 according to CryptoQuant data. Those wallets have amassed approximately 316,000 BTC over the last month. That is a marked turnaround since late November, when over the same period, this cohort sold around 650k BTC. Those sitting on the longest are not selling. They are adding.

It also has a mechanical event due on May 23. That day will see around 800,000 BTC which left Coinbase as selling peaked last year, cross the six-month age line. When that happens, they instinctively cross over to the long holder class. That alone might elevate the supply number later in the week even if no fresh purchase is made.

Saylor is watching

On Sunday, ahead of a drop on Monday, Michael Saylor published a chart via X that illustrates nearly six years of Bitcoin purchases by Strategy. Two words that go with it: Big Dot Energy.

Traders know this pattern. The chart goes up. The buy announcement follows. At prices Monday, Strategy holds 818869 BTC valued at about $63 billion. They would also be purchasing into this market having just seen its worst liquidation day in three months, if the sequence plays out as above.

📊 Market Watch

1️⃣ Kalshi just hit $4 billion in weekly volume. That figure was $54.5 million a year ago.

That's 7400% growth in one year alone, and Kalshi has now doubled Polymarket's volume in the category that Polymarket was founded on. Polymarket’s new V2 upgrade on April 28 went south when it was paused for an hour and wiped out each open limit order on the platform. Monthly volumes registered there first decline in eight months. The number of traders dropped by 12% from March to April. The platform's VP of engineering advised Bloomberg: "We let people down."

Kalshi operates on a single ordered book, has a distribution from Coinbase, Robinhood and PrizePicks in 38 states, and just closed a $1B Series F at an $22B valuation.

This begs the question, is Polymarket's gap a one-quarter execution issue or potentially something more structural.

2️⃣ Nuclear deal: Trump warns Iran clock is 'ticking'. Oil priced its highest rate this month on WTI

On Monday, Brent crude added 2% reaching $111.42 while WTI climbed 2.43% to $107.98 after Trump wrote on Truth Social: "For Iran the Clock is Ticking and they had better be quick about it, FAST, or else there will not be anything left of them."

Last week, the IEA warned that global oil inventories are being depleted at an unprecedented rate as markets work to offset the loss of supply from Middle East conflict.

If Hormuz is still blocked headed into peak summer demand, stockpiles could get to critical levels. This brought Brent up to +74% YTD. Asian stocks slumped, US future dipped mildly and G7 finance ministers gathered in Paris put the strait on the agenda of their meeting today. Eurogroup president said Hormuz openness is "extremely important." No one has a mechanism that can make that happen.

3️⃣ In Q1 2026, Trump's family purchased shares in Coinbase, Strategy and MARA.

OGE financial disclosures reveal nine Coinbase purchases, eight Strategy transactions and multiple MARA trades by Trump family accounts in Q1.

The single biggest purchase we recorded on Coinbase came earlier this month, also in a sense of the form: been made between $ 100,001 and $ 250,000 February 10.

The Trump Organization said in a statement that the president has no role in making specific investment decisions, and all trades are executed through discretionary accounts. The Senate Banking Committee voted 15-9 on May 14 on the CLARITY Act, but ethics provisions targeting the president's crypto holdings were not resolved in committee and moved to the floor instead. And the same bill that will regulate the industry Trump's family is buying into still doesn't have consensus rules governing what those purchases can look like.

Are you watching this?

Harvard cuts Bitcoin ETF stake, exits ETH

Harvard University’s endowment fund decided to reduce its investment in crypto ETFs. The first quarter of 2026 saw some massive slashing. The fund fully exited from its Ether ETF position. However, it also cut its stake in BlackRock’s linked BTC ETF by around 43%.

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