Crypto equities down heavily in pre-market trading amid broader price plunge

Crypto-related equities are trading down heavily in pre-market trading ahead of the U.S. open amid a broader price plunge over the weekend and into Monday morning surrounding U.S. recession fears and heightened geopolitical tensions.

Last week’s price declines in the crypto market were exacerbated over the weekend before falling dramatically on Monday morning — with bitcoin plummeting below $50,000 at one point — while ether lost all its year-to-date gains as its price dropped below $2,200. 

Shares in the crypto exchange Coinbase are currently changing hands for $167 in pre-market trading, down 18.5% on Friday’s closing price, according to TradingView — potentially set to wipe out its year-to-date gains.

Business intelligence firm, corporate bitcoin holder and Bitcoin development company MicroStrategy’s stock is faring worse, down 26.3% in pre-market trading. MicroStrategy announced it had raised its bitcoin holdings to 226,500 BTC just last week and intends to file for a new $2 billion at-the-market equity offering program.

Crypto and stock trading app Robinhood, which reportedly halted 24-hour trading on its platform amid the volatility this morning, is trading down 15.3%. Meanwhile, Jack Dorsey’s Block, which agreed to supply Core Scientific with its new 3-nanometer mining ASICs last month, is down 10% in pre-market trading.

Public Bitcoin miner stocks are also facing significant losses, with the top three U.S. firms by market cap, MARA, CleanSpark and Riot Platforms down 19.1%, 24.9% and 16.7%, respectively pre-market.

Spot Bitcoin, Ethereum ETFs and traditional stocks not immune

The U.S. spot Bitcoin and Ethereum exchange-traded funds may have had the weekend off, but they are not immune to the price action. BlackRock’s leading IBIT spot Bitcoin ETF is currently trading down 19.6% in pre-market trading as it catches up with the 24/7 crypto market. The asset manager’s spot Ethereum ETF, ETHA, is trading down 25.8% pre-market, with comparable moves across other issuers’ spot Bitcoin and Ethereum products.

With ether now trading below the approximate $3,000 to $3,500 range since the U.S. spot Ethereum ETFs began trading on July 23, all ETF holders are currently underwater ahead of the U.S. open. 

Bitcoin has traded between roughly $38,500 and $74,000 since the comparable Bitcoin products started trading in January. However, with bitcoin trading above $55,000 for the majority of that time, it is now likely that a significant proportion of U.S. spot Bitcoin ETF holders are also now underwater on their investment.

The traditional market is also suffering with the world’s top three stocks by market cap showing further declines in pre-market trading, wiping billions off their value. Shares in Apple and Microsoft are down 9% and 5.9%, respectively, while Nvidia stock shows pre-market losses of 13.5% amid reports of new AI chip delays.

Crypto market reaction

Heightened geopolitical tensions and fears of a recession in the U.S. amid last week’s poor employment report are among the factors currently spooking the market, according to analysts.

“The global economy is alerted with geopolitical tensions and the U.S. economy is facing recession pressure,” Bitget CEO Gracy Chen told The Block. “The U.S. stock market has fallen for three consecutive trading days, while the Japanese stock market has been in a circuit-breaker for two consecutive trading days. The panic index VXX soared 27% in a single day indicating the macro financial market is under great pressure for correction, causing wider market selling.”

“The emotional impact of large institutions’ market actions also play a role, with Berkshire Hathaway cash pile surging after selling Apple and Bank of America stocks in the past 12 trading days. Warren Buffett sold stocks and now holds cash in large quantities, affecting the overall sentiment of the market,” Chen added. “On the crypto front, Jump Crypto, a leading market maker in the crypto market, sold ether, causing the price to fall sharply after analysts bet downfall post ETF approvals.”

Chen’s comments concur with the view of Bitfinex analysts. "The crypto sell-off is macro-driven. We expect short-term support to be established around the $48,900 region. If there is no bullish momentum, this region may be retested, with the macroeconomic environment at that time determining further price action,” they told The Block. “The crash was primarily, if not entirely, driven by macroeconomic factors. It was triggered by the Bank of Japan’s carry trade crisis, the disappointing U.S. employment report, and a rise in unemployment. Additionally, the Sahm’s Rule, which has accurately predicted past recessions, has come into play in the U.S., heightening fears of a recession."

However, Binance CEO Richard Teng did not see crypto’s recent price drop as being indicative of a long-term trend. “Recent sharp drops in crypto and equity prices are influenced by macroeconomic factors. We do NOT believe it’s indicative of a long-term negative trend," Teng posted on X. "With potential Fed rate cuts and geopolitical volatility, there's still significant potential for market fluctuations."

Bitcoin is currently trading for $50,189, according to The Block’s Bitcoin Price Page, down 17.5% over the past 24 hours and 25% this last week. Ether is changing hands for $2,236 per The Block’s Ether Price Page, down 23.3% in the last 24 hours and 32% over the last seven days. Meanwhile, the GMCI 30, which represents a selection of the top 30 cryptocurrencies, has fallen 20.4% over the last 24 hours to 93.78 as the cryptocurrency market cap registers its largest daily drop since 2022.