Crypto Stocks Follow Bitcoin Lower
By Laxmikant Khanvilkar
Bitcoin, the most popular virtual digital currency, has pull back after failing in its attempt to pierce through $31,000 mark. It was hovering near $28,000 level, down 2.78% in the last 24-hours and down 9% this week. Similar trend was observed in case of Ethereum, XRP, Cardano, etc.
Downsizing of VDA prices has had a direct impact on companies engaged in ancillary activities. Most of the companies involved in related activities and are listed on the exchanges have suffered heavily in the last couple of sessions.
Leading declines were the bitcoin miners, with Marathon Digital (MARA) and Riot Platforms (RIOT) stocks both lower by about 10% and Hut 8 Mining (HUT) down by 9%.
Shares of crypto exchange Coinbase (COIN) and MicroStrategy(MSTR) – which holds 140,000 bitcoins in its treasury – both fell more than 6%.
Although, the specific reason for bitcoin losing more than 3% are still debated. It seems the Coinbase CEO hinting at shifting the base from U.S. other part of the world has spooked the markets. The company has already secured a license to operate in Bermuda.
The markets have also lost momentum due to the U.K. consumer price report early Wednesday morning – which unexpectedly showed inflation continuing to hold at above 10% in March.
The elevated levels of inflation soured the mood among many who were expecting Western central banks to back off of or even begin to reverse their series of rate hikes.
The U.S. economic data point too remain bearish for the financial markets.
Thursday morning, the Initial jobless claims report showed an increase 5,000 to 245,000 versus expectations for 240,000. The Philadelphia Fed Manufacturing Index for April fell to -31.30 versus expectations for -19.2 and against March’s read of -23.2. Finally, existing home sales for March fell 2.4% versus forecasts for a rise of 5%.
The next meeting of the U.S. Federal Reserve’s Federal Open Market Committee (FOMC) is two weeks away and short-term rate traders have priced in a nearly 100% chance of another 25-basis point rate hike. One week ago, trader bets on another rate hike were closer to 70%.
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