The sharp drop in Bitcoin (BCT) dragged down shares of companies in the digital asset space in the pre-trading session on Monday, as reported by Bloomberg. The world’s largest cryptocurrency plunged to its lowest level in 18 months, deepening the sell-off in risky assets.
The drop in crypto stocks is led by MicroStrategy Inc. The company holding 129,000 BTC tokens lost as much as 23%. Other companies that had a bad Monday are Coinbase Global Inc., Riot Blockchain Inc., and Marathon Digital Holdings Inc.
Shares of each of these cryptocurrency-related companies sank as much as 14% or so. Meanwhile, the MVIS CryptoCompare Digital Assets 100 Index, which tracks the performance of the 100 largest digital assets, also fell by the same amount.
This occurred just after crypto exchange Celsius Network Ltd. paused all user activity, including withdrawals and transfers. Following the collapse of TerraUSD (UST), concerns have loomed in the market and in political quarters over companies offering high returns to their clients.
Likewise, the CoinShares Blockchain Global Stock Index, which measures the stock market earnings of 49 companies around the world exposed to crypto assets, has fallen a whopping 37% so far this year.
The end of the easy money policy and the increase in interest rates led by the Federal Reserve added to the weaknesses of ecosystems such as Terra/Luna and the prospects of a recession on the horizon, which has been undermining investor confidence and pressuring cryptocurrency stocks.
- Since the beginning of the year, risk assets have fallen dramatically, causing the appetite for cryptocurrencies to decrease markedly.
- The BTC collapse accentuated the losses of crypto stocks on Monday.
The cryptocurrency, which has already accumulated seven days of consecutive falls and started the week losing up to 13%, has not been able to sustain itself at the $30,000 level and is now trading below $24,000.
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