Bitcoin
Cryptocurrencies suffer as tech stocks fall, ether drops 6%
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Cryptocurrencies fell a day after a reversal in technology stocks sent the S&P 500 and Nasdaq Composite to their lowest levels in the worst day since 2022.
Bitcoin fell 2% to $64,299.18 on Thursday morning, according to Coin Metrics. Disappointing quarterly earnings from Alphabet and Tesla on Tuesday night weighed on the rest of the tech sector as investors turned away from high-risk assets including cryptocurrencies.
“It’s pretty clear that the setbacks are more about broader macroeconomic forces, with global financial markets in turmoil,” said Joel Kruger, market strategist at LMAX Group. “Concerns around the health and outlook for the global economy have intensified amid weaker economic data, downbeat U.S. earnings and ineffective central bank accommodative moves. Consequently, there has been nowhere to hide, with most major assets in currencies, commodities and equities giving way to traditional safe havens.”
The market is also still in the midst of a Mt. Gox payout schedule underway which resulted in a persistent round of bitcoin selling pressure this month, he added.
About that, ether fell 6% to $3,172.59 as newly launched ether exchange-traded funds traded for a third day. The Grayscale Ethereum Trust (ETHE), which converted into an ETF, saw $484 million in outflows in the previous session.
“What’s happening is the same as when spot bitcoin ETFs were launched in January,” said Yuya Hasegawa, a cryptocurrency market analyst at Japanese bitcoin exchange Bitbank. “Grayscale’s Ethereum fund was trading at [a] discount for a long time, so traders may have bought some shares of the fund and are now selling ETH for spot arbitrage — this is also what happened with bitcoin when ETFs started trading.”
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Bitcoin and other cryptocurrencies are under pressure as the stock market routs
While bitcoin dipped for a few weeks after the launch of bitcoin ETFs in January, the launch of ether ETFs is being launched in a different market, and investors have potentially positive news to look forward to, which could boost prices, Hasegawa said.
Thursday marks the start of the Bitcoin 2024 conference, where investors are expecting speeches from pro-bitcoin U.S. politicians on both sides of the aisle, as well as Donald Trump. Additionally, expectations for a Fed rate cut in September are growing.
With cryptocurrencies down across the board, crypto-related stocks have also retreated. Coinbase fell 1%, while Microstrategy fell 3%. The largest bitcoin miners, Digital Marathon It is Riot platformsfell 2% and 4%, respectively.
Kruger called the recent setbacks in cryptocurrencies “a small hiccup within a strong uptrend,” noting that bitcoin and ether are up 51% and 38% year-to-date, in contrast to the S&P 500’s 14% gain over the same period.