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U.S. Crypto Stocks Sink in Pre-Market Trading as BTC Slumps
Bitcoin traded around $54,400 in Europe, a 24-hour drop of 5.8%, having earlier fallen to the lowest level since late February
Updated Jul 5, 2024, 3:26 p.m. Published Jul 5, 2024, 10:19 a.m.
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- The slump coincides with defunct crypto exchange Mt. Gox moving $2.6 billion worth of BTC to a new wallet prior to commencing creditor repayments.
- Michael Saylor's software company MicroStrategy, which holds over 210,000 BTC, and bitcoin miner Hut 8 led the declines.
U.S. crypto-adjacent stocks were in the red in pre-market trading on Friday as bitcoin crashed to the lowest level since February.
Michael Saylor's software company MicroStrategy (MSTR), which holds over 210,000 BTC, and bitcoin miner Hut 8 (HUT) were the worst affected, sliding 8.5% and 9.5%, respectively.
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Other mining companies, including Marathon Digital (MARA), CleanSpark (CLSK) and Riot Platforms (RIOT), fell between 6%- 7.5%. Cryptocurrency exchange Coinbase (COIN) lost 6.5%.
Bitcoin is hovering around $54,400 as of mid-morning in Europe, a fall of 5.8% in 24 hours. It earlier slumped as low as $53,600, its lowest level since late February.
The decline coincides with defunct crypto exchange Mt. Gox moving $2.6 billion worth of BTC to a new wallet, and saying it was commencing creditor repayments 10 years after it collapsed. Traders seem to have been spooked by the prospect of recipients immediately offloading their coins, creating mass selling pressure.
Read More: Mt. Gox Doomsday Scenario Involves Bitcoin Cash, Not Bitcoin: Analyst
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BlackRock's digital assets head: Leverage-driven volatility threatens bitcoin’s narrative
Rampant speculation on crypto derivatives platforms is fueling volatility and risking bitcoin’s image as a stable hedge, says BlackRock’s digital assets chief.
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- BlackRock digital-assets chief Robert Mitchnick warned that heavy use of leverage in bitcoin derivatives is undermining the cryptocurrency’s appeal as a stable institutional portfolio hedge.
- Mitchnick said bitcoin’s fundamentals as a scarce, decentralized monetary asset remain strong, but its trading increasingly resembles a "levered NASDAQ," raising the bar for conservative investors to adopt it.
- He argued that exchange-traded funds like BlackRock’s iShares Bitcoin ETF are not the main source of volatility, pointing instead to perpetual futures platforms.
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