While it may be easy to blame the current pullback solely on Terra's implosion, the truth is that the price of Bitcoin mining stocks has largely mirrored the performance of BTC since reaching a peak in November 2020.It's likely that the price of these stocks will struggle as long as Bitcoin continues to bleed lower in the face of multiple headwinds, including rising interest rates, inflation and global conflict.
While Robinhood is not a crypto-only exchange, roughly 18% of its Q1 net revenue came from crypto-related transactions, which is significant when comparing the size of the crypto market to the other markets supported on the platform.Bitcoin fights to hold $29K as fear of regulation and Terra’s UST implosion hit crypto hardThe declines in cryptocurrency-related stocks mirror a backdrop of widespread weakness in financial markets, especially the tech sector.
Several years of optimistic projections and quantitative easing have resulted in an overvalued and volatile tech sector that throws fits if earnings fall below expectations. Once the darlings of the mighty stock market, FAANG stocks have led the charge lower, weighing down the Nasdaq, which closed April with its worst monthly performanceThe losses for the Nasdaq further quickened in May as the benchmark index fell another 9.15% to its lowest level since November 2020.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
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