Several crypto-oriented stocks regressed in Friday’s pre-market trading, after a promising start to August as lead crypto BTC also fell.
Crypto stocks have once again taken a nosedive, with the latest coming in Friday’s pre-market trading session following Bitcoin’s fall to $21.6k. The loss of bullish momentum for the crypto space ends a week that has seen crypto assets stutter after a strong run at the start of August.
Stocks of crypto companies Marathon Digital (NASDAQ: MARA) and Riot Blockchain (NASDAQ: RIOT) are both trading 10% lower in pre-market. This development also comes ahead of the US market open, with MARA changing hands below $16. RIOT is currently trading under $9.
How Some Prominent Crypto Stocks Fared in Today’s Pre-market Trading
Marathon Digital and Riot Blockchain lead the way in losses with double-digit percentage declines. However, other crypto-focused companies are also trading relatively lower as of press time. For instance, prominent American exchange Coinbase (NASDAQ: COIN) is changing hands at $83.47 as of press time. A few hours ago, COIN’s price fell even lower to $77.81, representing a 6.91% decline from Thursday’s $85.44 price close.
This drop seems to be a glitch in Coinbase’s otherwise impressive performance so far in August, as COIN had risen by 57.15%.
MicroStrategy (NASDAQ: MSTR), one of the largest Bitcoin (BTC) holders, is currently trading at $324.38. MSTR had also dropped to $297.68, 8.23% lower than Thursday’s closing price.
The bearish development rocking the crypto landscape also extended to the traditional equities and stocks environment. For example, the Nasdaq 100 and S&P 500 indices also traded lower at 0.82% and 0.68%, respectively. Furthermore, this development comes after the equities market had managed to string together a series of solid runs since July 17th. The tech-heavy Nasdaq Composite rose by a substantial 20.88% during that period.
Fed Quantitative Tightening Likely Impacting Cryptocurrency and Tech Stocks
In other news, a June report suggested that the Fed’s quantitative tightening would impact crypto and tech stocks. According to this report based on a survey, the central bank’s attempts to combat inflation could be bad business for crypto and tech stocks. The Fed has been trying to rein in inflation for a sustained period by periodically raising interest rates.
Market observers opined that the volatile nature of crypto and tech stocks makes them the most at-risk assets. In addition, these analysts also think that the correlation between both stock types does not augur well for digital assets. Meanwhile, although some observers previously suggested gold as an inflation hedge for the crypto community, that argument appears moot now. This is due to the perceived correlation between digital assets and the Nasdaq Composite and Nasdaq 100. According to senior market analyst at Oanda Asia-Pacific Pte, Jeffrey Halley:
“It could well be that as Bitcoin is tested in a high inflation, rising rate environment for the first time, investors are choosing tradition over a new frontier. Gold has been an inflation hedge for millennia.”
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Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
Source: https://www.coinspeaker.com/crypto-stocks-decline-bitcoin-plunge/