The latest crypto market crash has seen the stocks of crypto-related companies take a sharp dive.
Business intelligence company MicroStrategy’s (MSTR) stock led the selloff, plunging 28% in premarket trading today. This is the largest drop in the company’s stock over the past five years.
MicroStrategy’s stock was trading at $152.06 at press time. This price denotes a 72.5% loss year to date and an 87.3% drop from its all-time high of $1,196.01 on February 10, 2021.
The massive drop in the day comes after Bitcoin (BTC) lost critical support levels and fell below $23,000. MicroStrategy, headed by CEO Michael Saylor — a big proponent of Bitcoin, has invested billions in purchasing its Bitcoin (BTC) holdings, which currently exceed 129,000 tokens.
Apart from MicroStrategy, the stocks of leading crypto players like Marathon Digital Holdings (MARA), Riot Blockchain (RIOT), and Coinbase Global (COIN) are all down more than 13%.
The lackluster performance in the stocks of crypto-related companies comes after the latest crypto market crash, which started Friday, June 10, after the U.S. Department of Labor released the latest Consumer Price Index (CPI) data, indicating rising inflation.
This crash has seen the capitalization of the digital asset market slump to $968.21 billion, breaching the $1 trillion mark for the first time in more than a year. Bitcoin (BTC), the largest crypto by capitalization, is trading at $23,462, its lowest level in over 18 months.
Traders continue dumping risky assets
Explaining the sharp decline in the prices of cryptocurrencies and crypto-related stocks, Susannah Streeter, the Senior Investment and Markets Analyst at Hargreaves Lansdown, said:
Crypto fans have become used to volatile rides, but these rollercoaster descents are increasingly hard to stomach. With the era of cheap money coming rapidly to an end, traders are becoming much more risk averse and turning their backs on crypto assets.
Traders have been increasingly dumping crypto after the clastarted abandoning crypto after the collapse of TerraUSD (UST) and Terra (LUNA). The collapse saw the Terra ecosystem lose over $40 billion within a week.
Before the Terra issue could die down, Celsius Network announced that it had suspended withdrawals, swaps, and transfers on its platform, citing extreme market conditions. This announcement saw investors pull back as fears of losing their investments became more apparent.
With many users moving funds to cold storage systems, Binance also paused withdrawals, claiming several transactions with low gas fees resulted in a backlog in the BTC network.
However, this explanation did not sit well with the crypto community, which accused the exchange of pausing withdrawals to protect people from selling their holdings, which could result in liquidity problems similar to Celsius Network.
The post MicroStrategy’s shares plunge in massive rout of crypto-related stocks appeared first on CryptoSlate.
