Shares of any crypto-related stocks had a rough start to the week Monday and some were down over 25%
Bitcoin (CRYPTO:BTC) fell from about $62,000 when the market closed Friday to a low of $50K on Saturday. Since then, it has regained some losses and BTC is back to a little over $55K at the time of writing this article.
There are a number of stocks that have taken it on the chin as a result, but Square‘s (NYSE:SQ) drop of 5.3% was notable. MicroStrategy (NASDAQ:MSTR) and Ebang International Holdings (NASDAQ:EBON) also fell 10.1% and 15.1% at their lows.
Meanwhile, startup Voyager Digital is down another -13% today. And Coinbase, who had an underwhelming IPO last week, is not fairing any better.
Crypto miners weren’t spared either, with MARA and RIOT losing a quarter of their capitalization. The lesser-known miners were hit even bigger, sending Canadian Bitcoin mining company Bitfarms into 25% correction. The price fell from $4.20 to $3.20 as of this writing.
The crypto sell-off over the weekend was driven by fears that the U.S. government will crack down on crypto activity. In particular, the U.S. Treasury is reportedly planning to increase oversight of financial institutions for carrying out money laundering through digital assets. The Central Bank of Turkey also banned the use of cryptocurrencies for use as payment late last week, which isn’t a good sign if the trend continues.
The reality of the market in 2021 is that volatility in cryptocurrencies is part of the market dynamics, especially for companies that have an interest in the asset class. And with a volatile asset like Bitcoin or Ethereum, stocks will inherently be volatile as well. With that said, if crypto-assets jump tomorrow these stocks could as well; the volatility works both ways. You should always be wary of FOMO and FUD. And as always, do your own research!