Crypto Stocks Trade Like Nasdaq’s Siamese Twin, Coinbase Crashes
As markets ready themselves for a possible relief rally in the coming days (both in stocks and crypto) it’s time to take a look at all the damage that’s been done. Big tech and crypto now trade in tandem, and so crypto stocks are also suffering.
MicroStrategy, led by Michael Saylor, dropped some 60 per cent off its value this year alone, of which 25% was lost on Monday. Top mining stock Marathon Digital (which last year was a major winner) now slumped 17%; Coinbase is now trading at it’s lowest level since it was listed on the stock market a year ago. The stock has lost more than 70% of its value since late March.
Coinbase said Tuesday that it lost hundreds of millions of dollars in the first quarter, sending stock tumbling in after-hours trading https://t.co/a9UVN0ZpQK— The Wall Street Journal (@WSJ) May 11, 2022
Bitcoin changed hands for $31k and most of the MSM (mainstream media) are focused on the fact that this means it has lost 50% since it’s All Time High of $69,000.
Cue stressed trader
As we’ve explained on these pages before, the MSM normally shows you pictures of stressed traders looking at screens with red figures at this point. Such was also the case at Business Insider which said there was simply ‘nowhere to hide’.
Alex Miller, chief executive officer of Hiro, explained to Reuters that:
Volatility in the market stems from speculation. And because bitcoin is so speculative, its price and the rest of the crypto market is dropping alongside the general markets.
Daniel Ives, strategist at Wedbush Securities, summarized it best when he said that:
This is a risk off across all asset classes including crypto.
Some investors are playing crypto like a hedge against inflation, but it’s trading like the Nasdaq’s Siamese twin.