Crypto-linked US stocks slump on bitcoin sell-off
04:00, 8 September 2021
Shares of US cryptocurrency-linked stocks Marathon Digital, Riot Blockchain, Coinbase Global and MicroStrategy fell on Tuesday after digital token prices plunged following El Salvador’s officially adoption of bitcoin as legal tender.
Bitcoin prices fell as much as 17% on Tuesday, dragging down stock prices of bitcoin miners, cryptocurrency exchanges and early adopters. As of 07:30 BST (UTC +1) on Wednesday, bitcoin prices were down 12.8% to $45,845.64.
US-based cryptocurrency miners Marathon Digital and Riot Blockchain slumped 9.3% and 6.7% respectively on Tuesday, while cryptocurrency exchange Coinbase Global fell 4.2%.
Buy the rumour, sell the news
Bitcoin plunged on Tuesday on a “buy leading up to the big event, sell the fact” reaction to El Salvador’s historic moment embracing the bellwether cryptocurrency, said Ed Moya, senior market analyst at OANDA.
“We could be at a tentative euphoria stage, which means volatility could swing in either direction,” Moya said in a note.
“Bitcoin’s fundamentals remain intact, as prices iron out a new trading range between the $46,000 and $53,000 levels. Until the US Federal Reserve releases its paper on digital currencies, bitcoin will likely remain rangebound,” Moya added.
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MicroStrategy tumbles
Enterprise software provider MicroStrategy tumbled 9% on Tuesday in line with the drop in crypto prices.
As of 30 June 2021, MicroStrategy held 105,085 bitcoins worth about $4.89bn, according to bitcoin prices on Wednesday. The company has said in its latest quarterly report that “acquiring and holding bitcoin” was one of two corporate strategies the firm is focusing on.
MicroStrategy’s CEO Michael Saylor, one of the most prominent Bitcoin advocates, invited investors via a tweet to buy $30 of bitcoin to show support for El Salvador’s crypto adoption.
BTC up 60% year-to-date
In Japan, shares of Monex Group, owner of cryptocurrency exchange Coincheck, fell nearly 3% by Wednesday afternoon.
Altcoins ether and Cardano’s ADA token were down more than 11% on Wednesday. Dogecoin dived nearly 16% to $0.2561.
Bitcoin has lost about 1% in the last seven days, according to CoinMarketCap. Bitcoin is up nearly 60% year-to-date, as of Wednesday.
Read more: Digital wallet crash day one of El Salvador’s Bitcoin uptake
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