MicroStrategy Incorporated (NASDAQ: MSTR) shares dropped 25% as cryptocurrency-related stocks slipped in premarket trading as the world’s largest cryptocurrency, Bitcoin, dipped to its lowest level in the past 18 months. The losses were a result of the growing selloff in risk assets and after a cryptocurrency lender stopped withdrawals.
MicroStrategy leads in sector-wide decline in crypto-related stocks
Over the past two years, MicroStrategy has accumulated over 129,000 Bitcoin (BTC) tokens. As a result, MicroStrategy led the selloff, followed by other cryptocurrency equities like Riot Blockchain Inc., Coinbase Global Inc., and Marathon Digital Holdings Inc., which witnessed huge declines of around 14%. On the other hand, the MVIS CryptoCompare Digital Assets 100 Index, that measures the 100 biggest digital assets dropped around 14%.
Bitcoin dropped sharply when cryptocurrency lender Celsius Network Ltd. announced it was halting withdrawals, transfers, and swaps on its network. In addition, concerns about the long-term viability of the company’s high payouts have emerged over the last few weeks after the crash of the TerraUSD (UST) virtual currency, which guaranteed depositors rates of up to 20%.
Crash of Terra/Luna in May affected market confidence
The possibility of increasing interest rates, a likely downturn, and the crash of the Terra/Luna network in May impacted hard on market confidence, and crypto equities have been under siege for months. The CoinShares Blockchain Global Equity Index, which covers 49 companies with cryptocurrency holdings from all over the world, has lost over 37% thus far, putting it on course for perhaps the worst yearly performance on record.
Although risk assets as a whole are down this morning, the fast decrease in Bitcoin prices has exacerbated the decline in cryptocurrency stocks. As it declined for the 7th day in succession, the world’s largest virtual currency fell by 13% and plunged just below the $24,000 barrier.
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