Crypto Stocks Fluctuate as Bitcoin Steadies After Selloff
Stocks exposed to cryptocurrencies pared losses as investors bought back into shares that had plunged in early trading following a rapid decline in Bitcoin on Saturday.
Marathon Digital Holdings Inc. gained 4.1% after falling as much as 14% Monday morning. Other stocks with heavy exposure to the crypto space also reversed losses for the day, with Coinbase Global Inc. and Riot Blockchain Inc. both essentially flat compared to earlier declines of as much as 8% and 13%, respectively. Still, some crypto-link stocks including MicroStrategy Inc. and Hut 8 Mining Corp remained decidedly lower.
Bitcoin was little changed, trading at $49,291 as of 2:00 p.m. in New York after falling as much as 4% earlier.
The recent string of declines provides investors “a buying opportunity as Omicron only strengthens the case for Bitcoin and the miners offer a better risk/reward,” according to D.A. Davidsion analyst Chris Brendler.
Bitcoin’s latest selloff hit a fever pitch on Saturday, as the world’s largest digital token dropped as much as 21% before paring its losses to just over 9%. The choppy trading spread to other digital tokens including Ether and Litecoin, both of which saw declines this morning. Meanwhile, the recently launched ProShares Bitcoin Strategy exchange-traded fund fell 7.6%, putting it on track to close at a fresh record low.
Monday’s volatile trading session for crypto-linked stocks follows what was a painful four-day stretch last week as global markets experienced a broader shift away from riskier asset classes. The Amplify Transformational Data Sharing ETF, which holds a range of shares linked to the cryptocurrency space, tumbled by nearly 9%, its biggest weekly loss since July. The fund fell as much as 6.2% early this morning and is currently lower by about 1%
“Crypto coins and tokens have been propelled higher in this era of ultra cheap money and as speculation swirls about just when central banks will start further tightening mass bond buying programs and start raising interest rates, they are likely to continue to be highly volatile,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
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