Bitcoin experienced a significant downturn on Wednesday, reaching approximately $72,000, marking its lowest point for the year amid heightened selling pressure across the digital asset market. This decline continues a bearish trend that began in mid-January, following a peak near $96,000.
The fallout from this selloff heavily affected crypto-related stocks, particularly for Strategy. As the largest corporate holder of Bitcoin, Strategy holds approximately 713,000 bitcoins, acquired at an average price close to $76,000. The recent drop to $72,000 translates into substantial unrealized losses for the company’s treasury, which amounts to roughly $2.9 billion. Consequently, Strategy's stock took a hit, plunging about 9% and settling around $121.9, a level that hasn't been seen since September 2024.
Coinbase and Robinhood also faced declines of approximately 8% and 10%, respectively, as investors were cautious and reduced their exposure to crypto-sensitive assets. Mining stocks experienced some of the biggest losses, with Cipher Mining plummeting around 21%, Iren down about 18%, and Hut 8 dropping by 14%. Other notable declines included Marathon Digital and Riot Platforms, both experiencing about 11% reductions.
The broader cryptocurrency market continued to exhibit weakness, with the total market capitalization decreasing approximately 3% to around $2.5 trillion. Ethereum traded near $2,100, Solana was about $90, and XRP fell to roughly $1.51.
This downturn in digital assets coincided with a pullback in other risk markets. The S&P 500 slipped about 1%, while the Nasdaq fell nearly 2%. Additionally, both gold and silver witnessed slight declines of approximately 1% and 0.3%, respectively.
Market anxiety was further evidenced by derivatives data, revealing that more than $120 million in crypto positions were liquidated within a few hours, with over $860 million lost in the past 24 hours. Investors are advised to remain vigilant and thoroughly assess market conditions as volatility across digital assets persists.