Cryptocurrency Market Takes a Hit as Tech Stocks Plummet
The cryptocurrency market is experiencing a significant downturn, with prices plummeting across the board. Bitcoin, the largest cryptocurrency by market capitalization, has fallen by 5% to $98,432.54, according to Coin Metrics. The broader market of cryptocurrencies, as measured by the CoinDesk 20 index, has dropped nearly 10%.
Tech Stocks Drive Crypto Sell-Off
The sell-off in cryptocurrencies is largely driven by a rout in tech stocks, sparked by concerns about U.S. dominance in artificial intelligence (AI) and big tech’s spending on AI models and data centers. Chinese startup DeepSeek’s announcement that it may have created a competitive AI model for a fraction of the cost has sent shockwaves through the tech industry.
Bitcoin Miners Feel the Pain
Bitcoin miners that power AI ventures are suffering deeper cuts, with Core Scientific sliding 18.5%, Terawulf losing 14%, and Iren (formerly known as Iris Energy) falling 10%.
Nasdaq Futures Take a Hit
Nasdaq futures are down about 4% in early trading, with shares of Coinbase and MicroStrategy falling 6% and 5%, respectively, in premarket trading.
Liquidations and Derisking
The cryptocurrency market is also experiencing a wave of liquidations, with over $250 million in long liquidations over the past 24 hours, according to CoinGecko. This is largely due to traders who used leverage to bet on the price of bitcoin being forced to sell their assets to cover their losses. Additionally, investors may be derisking ahead of this week’s Federal Reserve meeting, which is scheduled to conclude on Wednesday.
Market Reaction to Executive Order
The market’s reaction to President Donald Trump’s executive order on crypto, issued last Thursday, has been mixed. Some crypto traders were disappointed that the order didn’t fully commit to the establishment of a stockpile, while others didn’t care for the “stockpile” language versus a reserve.
Looking Ahead
Despite the current downturn, market strategists remain optimistic about the long-term prospects of the cryptocurrency market. “When we look at the bitcoin chart, there is nothing bearish about the price action,” said Joel Kruger, market strategist at LMAX.
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