BREAKING: Market Feels Powell’s ‘Pain’
Cryptocurrencies opened in a sea of red early Friday and little improved throughout the day. Bitcoin tumbled below $21,400 again, erasing its gains from better-than-expected inflation data released last week. Bitcoin miners Marathon Digital (MARA), Riot Blockchain (RIOT) and Hut 8 Mining (HUT) were all down more than 12% on the day. Crypto exchange Coinbase (COIN) dropped 11.3% by the closing bell as its SEC investigation heats up. And heavy bitcoin investor MicroStrategy (MSTR) saw its stock drop nearly 13% by the end of Friday.
Bitcoin was on a tear last week, nearly hitting $25,000 on July’s softer-than-expected CPI data. But Fed plans for continued rate hikes and discussions around crypto risk and regulations from Wednesday’s minutes sent it tumbling back to $21,300 by early Friday — its lowest level since the end of July.
And the world’s largest cryptocurrency dragged the rest of the digital asset markets with it. Ethereum, which holds the No. 2 spot by market capitalization, lost its gains from last week and was back around $1,700 by Friday afternoon. But Ethereum is holding above its level from the end of July, thanks to its anticipated merge to a proof-of-stake consensus next month.
Meanwhile, Bitcoin miner shares took early hits, owing to the correlation between their profit and revenue and the price of BTC. The day’s losses come after Marathon Digital, Hut 8 and Bitfarms all missed marks for quarterly results. Miners are still reeling from the broader cryptocurrency crash earlier this year.
Coinbase stock rose with the price of bitcoin over the past month and on news it partnered with BlackRock (BLK) on a crypto platform for institutional investors. But bitcoin’s price reversal, mixed earnings and an SEC investigation into selling unregistered securities nearly wiped out all of COIN stock’s August gains.
MicroStrategy, a software company that heavily invests in bitcoin, is down 9% early Friday. The company recorded a $917 million impairment on BTC in its latest earnings report. MicroStrategy’s cumulative impairment totaled $1.989 billion as of June 30, as co-founder Michael Saylor’s bitcoin-maximalist strategy piled on losses. Saylor stepped down from his role as CEO on Aug. 3 and appointed MicroStrategy president Phong Le to take the reins. Saylor still serves as executive chairman and head of the board’s Investments Committee, where he oversees the company’s bitcoin acquisition strategy.
You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison
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