Today, a rather impressive crypto crash is underway. Various high-profile, large-cap cryptocurrencies are seeing massive declines of 15% or more. Currently, Bitcoin (CCC:BTC-USD) is down nearly 10% today. This sort of decline has investors rethinking various Bitcoin stocks right now.
Companies with high levels of exposure to Bitcoin and other cryptocurrencies have generally done very well. Among those recent outperformers are Support.com (NASDAQ:SPRT), Coinbase (NASDAQ:COIN), Marathon Digital (NASDAQ:MARA), Riot Blockchain (NASDAQ:RIOT) and Sphere 3D (NASDAQ:ANY). Bitcoin miners, blockchain plays and decentralized exchanges alike, these stocks are all trending down today.
Investors may expect that these Bitcoin stocks are down because the price of Bitcoin is down. That’s true. However, that’s probably too simplistic.
Let’s dive into what’s behind today’s sector-wide decline in Bitcoin-related stocks.
Bitcoin Stocks Down on Key Catalysts
The price of Bitcoin and its cryptocurrency peers has fallen in dramatic fashion today. Indeed, whenever multiple cryptocurrencies fall by double-digits in a given day, investors take notice. This rapid price move has been deemed a “flash crash” by many experts. Accordingly, retail investors appear to be on edge with respect to whether this will be a one-day event or turn into a prolonged situation.
Today’s price action appears to be the result of a rather bumpy start for Bitcoin in El Salvador. With Bitcoin being adopted as legal tender for the first time at a federal level by a country, crypto investors have piled into crypto in a big way of late. However, the El Salvadorian government was forced to take its digital wallet offline today. The government reported that technical issues were the cause of this disruption. Accordingly, investors certainly have reason to feel deflated.
Again, questions remain with regard to today’s flash crash, and it’s ultimate impact over the next few days. Investors with crypto exposure will want to keep a close eye on how these assets rebound (or not) in the days to come.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
