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Bitcoin Mining Stocks With AI Ambition Battered 20%-30% Lower as Nvidia's Plunge Grips Crypto
The selloff could provide traders an attractive entry opportunity in higher-beta altcoins such as Solana's SOL, which endured a double-digit pullback, one analyst said.
Jan 27, 2025, 10:23 p.m.
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What to know:
- Bitcoin rebounded modestly, while mining stocks suffered sharp declines amid concerns over miners' AI infrastructure value. RIOT lost 16%, while high-performance computing stocks Core Scientific (CORZ), TeraWulf (WULF), Bitdeer (BTDR) plunged as much as 30%.
- The market-wide selloff wiped out $1 billion in leveraged crypto positions and reinforced crypto's tight correlation with tech stocks.
- Traders attention shifts to upcoming Federal Reserve decisions and big tech earnings.
Bitcoin managed a minor bounce of its worst levels of the day, but the bitcoin mining stocks were unable to reverse any of their plunge as Chinese AI startup DeepSeek threw into question ideas that the miners had value as data center plays.
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The largest cryptocurrency was recently trading at $101,500, up from earlier lows around $98,000 and still down 3% over the past 24 hours. The broader market gauge CoinDesk 20 Index fell 5.6%, dragged lower by double-digit losses of AI-adjacent tokens render (RNDR) and filecoin . Solana, which is a key hub for crypto AI agent tokens, also fell over 10%.
The sharp move down liquidated nearly $1 billion of leveraged derivatives positions across crypto assets, CoinGlass data shows.
The Nasdaq closed the session 3% lower, with Nvidia leading losses with a 17% plunge, erasing $465 billion of its market value in a day. Today's move also reinforced bitcoin's tight correlation with tech stocks, Standard Chartered Bank's digital asset research head Goeffrey Kendrick noted.
The broad-market pullback didn't spare crypto-adjacent stocks, as crypto exchange Coinbase (COIN) and investment firm Galaxy (GXY) closed the day 6.7% and 15.8% lower. MicroStrategy, the largest corporate bitcoin holder, held up relatively well with a 1.5% decline.
Crypto mining stock rout
Bitcoin mining stocks suffered even steeper losses, with large-cap miners Riot Platforms (RIOT), MARA Holdings (MARA) plunging 8.7% and 16%, respectively.
Miners that pivoted to high-performance computing to provide infrastructure for artificial intelligence (AI) training fared even worse. Core Scientific (CORZ), TeraWulf (WULF), Bitdeer (BTDR) and Cipher Mining (CIPH), Applied Digital Corporation (APLD) all endured 25%-30% declines through the day."It seems that the crypto markets and AI supply chain-linked stocks — such as the Nuclear ETF, which had risen 20% over the past month leading up to today — reached a point where they needed an 'event' to trigger a profit-taking correction after pricing in a significant amount of 'good news,'" said Aurelie Barthere, principal research analyst at blockchain intelligence firm Nansen.
Market participants will focus on this week's Federal Reserve meeting and large tech firms' earnings reports. Corporate earnings have been strong so far, but the coming reports from Nvidia and other big tech firms "will need to beat expectations to sustain the momentum," Barthere said.
The Monday selloff could also provide an attractive entry opportunity for altcoin investors who missed out on the crypto rally following Donald Trump's election victory, Barthere added, "particularly in higher-beta crypto tokens like solana (SOL), which have experienced steeper sell-offs compared to BTC."
Read more: Bitcoin's DeepSeek-Triggered Selloff Is a Buy the Dip Opportunity, Analysts Say
More For You
‘Bitcoin to zero’ searches spike in the U.S., but the bottom signal is mixed
Google Trends data shows the term hit a record high in the U.S. this month, though global interest has fallen since peaking in August.
What to know:
- U.S. searches for “bitcoin zero” on Google hit a record high in February as BTC slid toward $60,000 after hitting a peak in October.
- In the rest of the world, searches for the term peaked in August, suggesting fear is concentrated in the U.S. rather than worldwide.
- Similar U.S. search spikes in 2021 and 2022 coincided with local bottoms.
- Because Google Trends measures relative interest on a 0-to-100 scale amid a much larger bitcoin user base today, the latest U.S. spike signals elevated retail anxiety, but does not reliably guarantee a clean contrarian reversal.
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