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Plunging U.S. Stocks Help Add to Crypto's Bad Day
The week's uptrend was quickly upended by the hack at crypto exchange Bybit.
Feb 21, 2025, 8:35 p.m.
What to know:
- Early gains in cryptos and crypto-related stocks first took a hit from the $1.5 billion Bybit hack
- A quick retreat in U.S. stocks in later in the day pressured crypto even further.
- Among news items hitting stocks was a poor read on consumer sentiment and a report on a new coronavirus discovered in China.
Only a handful of hours ago crypto markets were buoyed as the Securities and Exchange Commission signaled its intent its dismiss a lawsuit against Coinbase (COIN).
The welcome regulatory news sparked 5% gains for COIN and the likes of increasingly important crypto trading platform Robinhood (HOOD), and sent bitcoin breaking out of its recent tight trading range to within sight of the $100,000 level.
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The first bomb to break the good vibes came late in the U.S. morning when Bybit was stung by about a $1.5 billion hack — the largest such exploit ever in crypto. That news sent bitcoin and ether sliding roughly 2% in a manner of minutes.
Prices quickly seemed to stabilize and — at least in the case for bitcoin — bounce a bit.
Et tu stocks?
Any sort of bounce, however, was quickly snuffed out as modest losses for U.S. stocks began to accelerate in afternoon trading.
Among the excuses for the quick retreat was a poor reading from the Michigan Consumer Sentiment Index, which unexpectedly slipped to 64.7 versus forecasts for 67.8. The same survey's inflation expectations rose to 3.5% against an expected 3.3%.
An outlier, but perhaps also a reason for selling, was a new coronavirus scare out of China. Discovered by researchers at the Wuhan Institute, HKU5-CoV-2 is "strikingly similar" to the virus that caused the 2020 pandemic, according to the Daily Mail.
Shortly before the close of trading on Friday, the Nasdaq is lower by 2.2% and the S&P 500 by 1.7%. The 10-year U.S. Treasury yield has fallen nine basis points to 4.42%.
As for crypto, bitcoin has more than erased its gains of the past couple of days, trading back to $95,000 and lower by nearly 4% over the past 24 hours. Ether has pulled back to $2,650, also lower by about 4%. The broader CoinDesk 20 Index is down 4.4%.
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