Bitcoin (BTCUSD) briefly fell below $50,000 on Monday for the first time since February, as fears about the U.S. economy contributed to a widespread market rout that extended beyond equities. Over the past 24 hours, approximately $1.2 billion worth of cryptocurrency positions were liquidated.
Bitcoin investors have faced a volatile ride. The cryptocurrency’s morning low was nearly 30% below the $70,000 mark it reached just a week ago. However, Bitcoin showed some recovery, trading above $54,000 by early Monday afternoon.
Impact on Bitcoin ETFs, Altcoins, and Crypto Stocks
The decline in Bitcoin’s price also affected related assets. On Friday, as stock markets began to falter, investors withdrew $237.4 million from spot Bitcoin exchange-traded funds (ETFs), according to Farside Investors.
Altcoins experienced even sharper declines. Ether (ETHUSD) fell 24% over the past week, while Solana (SOLUSD) saw a 28% drop.
Crypto-related stocks were hit hard by both the equity market downturn and the crypto sell-off. Shares of MicroStrategy (MSTR), a major corporate holder of Bitcoin, decreased by 9%. Block (SQ) and Coinbase (COIN) experienced declines of 2% and 5%, respectively.
Bitcoin mining stocks also fell. Cleanspark (CLSK) dropped 11%, Hut 8 (HUT) was down 7%, Marathon Digital (MARA) declined 5%, and Riot Platforms (RIOT) fell 3%.
Historical Context and Market Reactions
Significant drawdowns in Bitcoin’s price are not unusual, particularly following halving events like the recent one in April. Although Bitcoin is often perceived as a safe haven, its recent performance alongside the equity market suggests it remains a risk-on asset in times of global market uncertainty.
Despite the current turmoil, some long-term Bitcoin advocates remain optimistic. Bitwise Chief Investment Officer Matt Hougan commented on X, “People smash the sell button for liquid assets during broad-based panics. But from my seat, today’s events play into the long-term story for Bitcoin.”
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