Anticipation for the Coinbase (NASDAQ:COIN) IPO (initial public offering) was a bullish support for cryptocurrency equities including Marathon Digital (NASDAQ:MARA) on Monday and Tuesday. Yet it appears that support has transformed into pressure, with MARA stock down more than 15% today.
Opening at $381, COIN surged in early trading today before entering a decline to a low of $310 and rebounding slightly to end the day down 14%. That decline hurt a number of cryptocurrency plays including MARA stock, Riot Blockchain (NASDAQ:RIOT) and MicroStrategy (NASDAQ:MSTR), the latter of which are down 15% and 13% respectively.
Coinbase had a reference price of $250, which helps to explain the downtrend since the open. However, the simple fact that the stock ended the trading day lower than it started certainly put a dampener on cryptocurrency bulls’ exuberance this week.
Over the past weeks, Marathon Digital has been outperforming its sector peers and the wider markets. That might be because MARA stock is highly correlated with the price of Bitcoin (CCC:BTC-USD), as InvestorPlace’s Chris Markoch discussed a few weeks ago.
Bitcoin is down slightly (1%) in trading today, but it’s more likely Wednesday’s decline in Marathon Digital is because “speculators [got] ahead of themselves in MARA stock,” in the words of InvestorPlace contributor Ian Bezek on April 2.
On the date of publication, Vivian Medithi did not have (either directly or indirectly) any positions in the securities mentioned in this article.