Key Takeaways
- Bitcoin and other cryptocurrencies are losing ground Monday, while stocks related to the industry are also slumping.
- Bitcoin fell sharply in November, as uncertainty in the markets led some investors to shed riskier assets such as cryptocurrencies.
Cryptocurrencies tumbled Monday morning as risk-averse sentiment returned to financial markets.
Bitcoin (BTCUSD), the largest cryptocurrency by market capitalization, was trading at $84,200 recently, down from a weekend high of around $91,000. Other digital assets, including ether and solana, were also down sharply.
Crypto-related stocks also retreated, with shares of trading platform operators Coinbase (COIN) and Robinhood (HOOD) each dropping more than 6%, making them among the top decliners today in the S&P 500. Shares of Strategy (MSTR), the largest corporate holder of bitcoin, plunged 11%, while bitcoin miner Mara Holdings (MARA) fell 8%.
Why This Matters to Investors
Cryptocurrency moves can indicate how investors feel about the broader market. Assets such as bitcoin tend to rise in stable markets when investors are more comfortable taking risks, but can fall sharply when volatility is high and investors have less of an appetite for risk.
The price of bitcoin swung wildly in November—hitting a high near $110,000 early in the month before sliding as low as $82,000 a few weeks later—as volatility gripped financial markets, weighing heavily on assets that are perceived as risky.
Strategy CEO Phong Le said in an interview released last week that the company would consider selling bitcoin to fund things like stock dividends if its mNAV, a metric that tracks the value of its bitcoin holdings to the company’s market capitalization, falls below 1.00. Strategy’s mNAV was at about 1.1 recently.
“There’s the mathematical side of me that says that would be absolutely the right thing to do, and there’s the emotional side of me, the market side of me, that says we don’t want to really be the company that’s selling bitcoin,” Le said. “Generally speaking, for me, the mathematical side wins.”
