Marathon Digital, Riot Blockchain feel the heat and crash

While Wednesday seemed to be just another day for leading digital tokens, Bitcoin and Ethereum, as they traded in expected ways despite the Initial Public Offering (IPO) of cryptocurrency exchange Coinbase Global, the effects on volatile crypto stocks were not as pleasant.

In fact, Bitcoin-mining leaders Marathon Digital Holdings and Riot Blockchain experienced what experts would say crash, as their stocks plummet 17.1% and 16.6%, respectively. Crypto Miner Bit Digital started the day on a positive note but was trading 6.7% come afternoon.

Data Analytics company Microstrategy, despite having its cash reserves invested in Bitcoin tokens, also saw a drop of at least 12.5% on their stocks.

Expert and investors ask the same question

Why would the public offering of Coinbase make the share prices among Bitcoin miners fall? The same goes for other companies with a heavy interest in rising Bitcoin prices. It will not make any sense as this momentous event was heavily advertised and deemed a significant turning point in the history of cryptocurrencies.

In fact, many believed that this new “form” of Coinbase could become a reliable stabilizing force for this market that is so volatile. Moreover, it is expected to help traditional investors understand the concepts of this idea.

To that end, many were confused as to why Marathon Digital and Riot Blockchain crashed during this historic moment.

Bad news for market high flyers

Over the last year, Marathon’s stock has gained 9,600%, while Riot Blockchain’s rose by 4,800%. These massive gains made them the highest fliers in the crypto market.

But the move of Coinbase and its supposed stabilizing effect can be bad news for these two since their gains revolved around the idea of rising Bitcoin prices now and in the future.

If the price becomes stable, then the gains in the stock of companies such as those of Marathon and Riot Blockchain will be affected directly.

 

Image courtesy of Alesia Kozik/Pexels

Micky is a news site and does not provide trading, investing, or other financial advice. By using this website, you affirm that you have read and agree to abide by our Terms and Conditions.
Micky readers - you can get a 10% discount on trading fees on FTX and Binance when you sign up using the links above.