Stocks related to %Cryptocurrencies have suffered steep declines as equity markets around the world selloff on rising fears of a U.S. recession.
The stock of cryptocurrency exchange %Coinbase (NASDAQ: $COIN) fell 7%, while software firm turned %Bitcoin (CRYPTO: $BTC) acquirer %MicroStrategy (NASDAQ: $MSTR) saw its share price plunge 10% on Aug. 5.
Stocks of crypto miners were also hard hit, with Marathon Digital (MARA) falling as much as 11% before recovering into the market’s close and Riot Platforms’ (RIOT) share price ending the day down more than 3%.
The steep declines come as cryptocurrency prices also plunged, with Bitcoin dropping 11% and briefly falling below $50,000 U.S., its lowest level in nearly six months.
The damage in the crypto sector comes as stock markets around the world selloff after economic data pointed to a potential recession in the U.S.
The blue-chip Dow Jones Industrial Average shed more than 1,000 points on Aug. 5 and the tech-laden Nasdaq index is now in a correction defined as a 10% decline from recent highs.
At the same time, the Cboe Volatility Index (VIX), which is commonly known as Wall Street’s “fear gauge,” is at its highest level since the Covid-19 pandemic struck in March 2020.
In Japan, the benchmark Nikkei 225 index plunged 12% while the Stoxx Europe 600 index declined 3.3% on Aug. 5.
Stocks and cryptocurrency prices appear to now be recovering, with Bitcoin regaining its key support level of $55,000 U.S.
However, analysts say that investors should brace for continued volatility in the market and that a bottom has likely not yet been reached for both stocks and cryptocurrencies.
