Coinbase, MicroStrategy and Bitcoin mining stocks slide amid spot ETF launches

Quick Take

  • Bitcoin-related equities — including Coinbase, MicroStrategy and mining stocks — tumbled in market trading yesterday following the inaugural launch of 11 spot bitcoin ETF products in the U.S.
  • Bitcoin miners Riot Platforms and Marathon Digital were hit hardest — falling 16% and 13%, respectively — while Coinbase slid 7% and MicroStrategy by 5%.

Shares in bitcoin-related companies — including Coinbase, MicroStrategy, Riot Platforms and Marathon Digital — slid yesterday as trading began for the 11 newly approved spot bitcoin ETFs in the United States.

The stocks have risen significantly over the past year — gaining up to 300% — with investors potentially using the products as a proxy for bitcoin pre-spot ETF approval. Now that the bitcoin ETF products have launched, profit-taking appears to occur as the narrative draws to a close. However, some are speculating the proxy stocks are now draining into the new spot bitcoin funds.

Bitcoin BTC +0.82% mining company Riot was the most brutal hit, dropping 15.8% yesterday to $13.09 and is down a further 2.6% in pre-market trading, according to TradingView. The stock has gained 137% over the past year.

RIOT/USD price chart. Image: TradingView.

Marathon only fared slightly better — down 12.6% yesterday to hit $22.40 by market close — and is currently another 3.3% down in pre-market trading. MARA is up by around 293% in the last year, however.

Fellow mining firms CleanSpark and Iris Energy also fell — dropping 7% and 6%, respectively.

MARA/USD price chart. Image: TradingView.

Coinbase and MicroStrategy shares also decline

Shares in crypto exchange Coinbase — which is also the custodian for the majority of the new U.S. spot bitcoin ETFs — fell 6.7% on Thursday to $141.16 by market close and has dropped another 2.6% in this morning's pre-market trading. Coinbase's stock has also been on an impressive run leading up to the bitcoin ETF approvals, gaining more than 236% over the past year.

COIN/USD price chart. Image: TradingView.

MicroStrategy is the the largest corporate holder of bitcoin, owning 189,150 BTC it purchased at an average price of $31,168. The software firm’s stock fell 5.2% yesterday to close at $536.18 and is currently down 1.5% in pre-market activity today. Like the other bitcoin-related stocks, MicroStrategy is also up significantly during the last 12 months — rising by 184%.

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MSTR/USD price chart. Image: TradingView.

New spot bitcoin ETFs hit $4.5 billion in day-one trading volume

Thursday marked the first day for trading U.S. spot bitcoin ETFs after the Securities and Exchange Commission approved 11 new products on Wednesday — generating a total trading volume of more than $4.5 billion, according to data from Yahoo Finance compiled by The Block.

BlackRock's spot bitcoin ETF (IBIT) reached $1.05 billion in trading volume, surpassing BITO’s $1 billion first-day futures bitcoin ETF volume in 2021.

Fidelity's FBTC spot bitcoin ETF hit nearly $685 million.

Grayscale's spot bitcoin ETF product (GBTC) generated greater trading volume than those two, combined — reaching about $2.3 billion. However, Grayscale's ETF is a conversion of its flagship GBTC fund, and it's unclear how much of Grayscale's volume could be capital flowing out of the instrument.

The ARK 21Shares bitcoin ETF (ARKB) has generated $278 million worth of trading volume so far, and Bitwise (BITB) $122 million. Of the remaining ETFs, Franklin Templeton (EZBC), Invesco Galaxy (BTCO) and VanEck (HODL) all witnessed trading volumes below $100 million. Meanwhile, Valkyrie (BRRR), WisdomTree (BTCW) and Hashdex's (DEFI) trading volumes fell short of $10 million.

"While it's premature to make final judgments, this significant trading volume indicates a considerable influx of investor funds into the spot-based bitcoin ETFs," CoinShares Head of Research James Butterfill said.


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© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

James Hunt is a reporter at The Block, based in the UK. As the writer behind The Daily newsletter, James also keeps you up to speed on the latest crypto news every weekday. Prior to joining The Block in 2022, James spent four years as a freelance writer in the industry, contributing to both publications and crypto project content. James’ coverage spans everything from Bitcoin and Ethereum to Layer 2 scaling solutions, avant-garde DeFi protocols, evolving DAO governance structures, trending NFTs and memecoins, regulatory landscapes, crypto company deals and the immersive metaverse. You can get in touch with James on Twitter or Telegram via @humanjets or email him at [email protected].

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