Reason Behind Today’s Falling Stocks Of Cryptocurrency

Cryptocurrency Stocks Are Falling Today
  • With Bitcoins stocks falling by 28 per cent, all the companies supporting it are also witnessing a decline in their stocks.
  • A whole lot of six major companies have faced a decline in their shares by a value of nearly 10%
  • We have seen evidences that how Bitcoin’s falling stocks have affected the stocks of MicroStrategy

The falling of Bitcoin’s stock has significantly impacted the cryptocurrency stocks in the bear market by a value of 28%. They have officially been a part of the bear market. It has also affected the companies that have been backing companies like mining Bitcoin, Bitcoin, etc., and providing them with all the mining equipment. As of 2:30 pm, on 28 January 2021, these have been the movers in the list :

  • Riot Blockchain shares were down by a value of 6%
  • Hut and Mining shares declined by 10%
  • MicroStrategy’s shares have fallen by 5%
  • The shares of Bit Digital were down by a value of 5%
  • Canaan’s shares have fallen by 8%
  • The shares of the Marathon Patent Group has also declined by 5%

There exists a possibility that some of the stocks are being impacted by the short squeeze of GameStop, along with Bitcoin’s effect due to the falling shares.

The actual effects on the stocks and the players behind it

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The special case of MicroStrategy requires mention. It is unknown that a huge amount of MicroStrategy’s stocks are in collaboration with Bitcoin than any other companies or stocks of the cryptocurrencies. This is because it holds 70784 tokens of Bitcoin in the balance sheets, which has a price as high as $2.1 billion with the current set price of $30,000 for each token. Being a medium-sized company, a greater portion of the value of MicroStrategy is directly extracted from the present market value of bitcoin. Therefore, with the rise and fall in the market stocks of Bitcoin, MicroStrategy is equally affected.

Other things that have affected the stocks

The traders of short-term, do not stick around with the long-term traders and long-term works. These short-term traders stay only as long as they can make money out of the trade; once the money reduces, they will leave and market freely or join some other market that promises money and profits. If we consider the stocks like GameStop, which are highly shorted, Express, and stocks like AMC Entertainment Holdings, they have been rising to values much higher than 100% and 200% day by day. The above logical theory can be backed by the evidence of these particular companies’ stocks and trading volumes. Taking Riot’s example, whose average trade volume has crossed 26 million in the past month.

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Andrew Smith
Andrew is a blockchain developer from his education and developed his interest in the cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer.

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