The crypto market has been on a wild ride lately, with major cryptocurrencies like Bitcoin (BTC) experiencing significant price fluctuations. This volatility has had a ripple effect on the U.S. crypto stocks, which have sunk in pre-market trading as BTC slumps to its lowest level since February.
Crypto Stocks Plummet
U.S. crypto-adjacent stocks were in the red in pre-market trading on Friday, with some of the biggest names in the industry taking a significant hit. Michael Saylor’s software company, MicroStrategy (MSTR), which holds over 210,000 BTC, and bitcoin miner Hut 8 (HUT) were the worst affected, sliding 8.5% and 9.5%, respectively. Other mining companies, including Marathon Digital (MARA), CleanSpark (CLSK), and Riot Platforms (RIOT), fell between 6% and 7.5%, while cryptocurrency exchange Coinbase (COIN) lost 6.5%.
Bitcoin’s Decline
The slump in crypto stocks coincides with a sharp decline in the price of Bitcoin. As of mid-morning in Europe, BTC is hovering around $54,400, a fall of 5.8% in 24 hours. The cryptocurrency earlier slumped as low as $53,600, its lowest level since late February.
Factors Behind the Decline
The decline in BTC’s price is believed to be linked to the news that the defunct crypto exchange Mt. Gox has moved $2.6 billion worth of BTC to a new wallet with the intention of commencing creditor repayments. Traders seem to have been spooked by the prospect of recipients immediately offloading their coins, creating mass selling pressure.
“The Mt. Gox doomsday scenario involves Bitcoin Cash, not Bitcoin,” according to a CoinDesk analyst.
Conclusion
The crypto market has been experiencing significant volatility in recent weeks, and this has had a direct impact on U.S. crypto stocks. With BTC slumping to its lowest level since February, investors are closely watching the market for any signs of recovery or further decline. As the crypto industry continues to evolve, it’s important for investors to stay informed and make well-informed decisions.
