Crypto Stocks Plunge as Bitcoin's Sustained Sell-Off Breaches $81,000
MicroStrategy, Coinbase, and mining firms lead the sector's decline amid weakening investor sentiment and mounting unrealized losses across the digital asset market.
Shares of cryptocurrency-related companies tumbled this week, caught in the downdraft of a sharp and sustained sell-off in Bitcoin, which breached a key psychological level to trade near its lowest point since mid-April.
The widespread decline has punished companies whose business models are closely tethered to the price of the world’s largest digital asset. MicroStrategy Inc. (MSTR), the software firm with a massive corporate treasury of Bitcoin, has seen its stock fall over 17% this week, trading near its 52-week low of $166.32. Leading crypto exchange Coinbase (COIN) dropped more than 15% over the same period, while Bitcoin miners Marathon Digital (MARA) and Riot Platforms (RIOT) shed approximately 18% and 7%, respectively.
This broad-based retreat comes as Bitcoin’s price fell below $81,000 in volatile trading, marking its steepest monthly decline since 2022. The downward pressure reflects a significant souring of investor mood, with a recent Benzinga report suggesting that over 70% of active Bitcoin capital is now sitting at an unrealized loss. This market stress indicates that many recent investors are now underwater, increasing the risk of further capitulation.
"The tight correlation between these equities and Bitcoin's price is a double-edged sword," noted a market analyst. "During bull runs, they offer leveraged exposure to the upside. But in a downturn, their valuations can unravel just as quickly."
MicroStrategy’s stock, now trading around $170.50, has been particularly hard-hit due to its aggressive Bitcoin acquisition strategy. The company holds a substantial amount of the cryptocurrency on its balance sheet, a strategy championed by Executive Chairman Michael Saylor. While this bet produced staggering returns during crypto rallies, it has now become a significant liability, with the stock’s performance acting as a high-stakes proxy for Bitcoin itself.
Similarly, Coinbase, which generates a significant portion of its revenue from trading fees, is facing headwinds from both declining asset prices and potentially lower trading volumes. Investor enthusiasm often wanes during periods of market fear, which can directly impact the exchange’s profitability. Its shares closed around $240, a steep drop from their 52-week high of over $444.
The pain has been equally acute for Bitcoin miners. The profitability of firms like Marathon Digital and Riot Platforms is directly linked to the price of Bitcoin, as it determines the value of the coins they are awarded for validating transactions on the blockchain. With Bitcoin's price falling, profit margins for these miners are squeezed, pressuring their stock prices. Marathon hit a low near $9.71, approaching its 52-week bottom.
Analysts attribute the digital asset's slide to a confluence of factors, including macroeconomic policy shifts and significant outflows from Bitcoin ETFs, which had previously been a major source of institutional demand. As the market looks ahead, investors are closely watching whether Bitcoin can find stable footing or if this correction will deepen, pulling its publicly-traded proxies further down with it.