Crypto Stocks Crash Amid Global Market Rout

Yolowire 6-Aug-2024 10:07 AM

Stocks related to %Cryptocurrencies have suffered steep declines as equity markets around the world selloff on rising fears of a U.S. recession.

The stock of cryptocurrency exchange %Coinbase (NASDAQ:COIN) fell 7%, while software firm turned %Bitcoin (CRYPTO: BTC) acquirer %MicroStrategy (NASDAQ:MSTR) saw its share price plunge 10% on Aug. 5.

Stocks of crypto miners were also hard hit, with Marathon Digital (MARA) falling as much as 11% before recovering into the market’s close and Riot Platforms’ (RIOT) share price ending the day down more than 3%.

The steep declines come as cryptocurrency prices also plunged, with Bitcoin dropping 11% and briefly falling below $50,000 U.S., its lowest level in nearly six months.

The damage in the crypto sector comes as stock markets around the world selloff after economic data pointed to a potential recession in the U.S.

The blue-chip Dow Jones Industrial Average shed more than 1,000 points on Aug. 5 and the tech-laden Nasdaq index is now in a correction defined as a 10% decline from recent highs.

At the same time, the Cboe Volatility Index (VIX), which is commonly known as Wall Street’s “fear gauge,” is at its highest level since the Covid-19 pandemic struck in March 2020.

In Japan, the benchmark Nikkei 225 index plunged 12% while the Stoxx Europe 600 index declined 3.3% on Aug. 5.

Stocks and cryptocurrency prices appear to now be recovering, with Bitcoin regaining its key support level of $55,000 U.S.

However, analysts say that investors should brace for continued volatility in the market and that a bottom has likely not yet been reached for both stocks and cryptocurrencies.