Why Crypto Stocks Plunged Today

  • June 20, 2021
  • Fool
  • 54

With crypto down, there's less money to be made in crypto stocks.

What happened 

Shares of any stock related to cryptocurrencies had a rough start to the week Monday and some were down over 10%. Bitcoin (CRYPTO:BTC) fell from about $62,000 when the market closed Friday to $55,880 as of this writing, although its low yesterday was below $54,000. Ethereum (CRYPTO:ETH) was over $2,400 when the market closed Friday and is now at $2,176. 

There are a number of stocks that have taken it on the chin as a result, but Square's (NYSE:SQ) drop of 5.3% was notable today. MicroStrategy (NASDAQ:MSTR) and Ebang International Holdings (NASDAQ:EBON) also fell 10.1% and 15.1% at their lows. The three stocks are down 3.9%, 8.5%, and 9.3% respectively as of 4 p.m. EDT. 

So what

The crypto sell-off over the weekend was driven by fears that the U.S. government will crack down on some crypto activity. In particular, the U.S. Treasury is reportedly planning to increase oversight of financial institutions for carrying out money laundering through digital assets. The Central Bank of Turkey also banned the use of cryptocurrencies for use as payment late last week, which isn't a good sign if the trend continues.

A company like Square makes money off cryptocurrency trades on its platform, so any drop in the price will likely lead to lower commissions.

For MicroStrategy, the impact is more direct: It holds 90,531 Bitcoins with a value of $2.171 billion as of Feb. 24 on the balance sheet. The drop in crypto value is a direct loss to the company.

Ebang International makes chips for Bitcoin mining and has launched its own cryptocurrency exchange, so the drop in crypto assets could be a direct hit to the bottom line. Crypto mining relies on high prices for crypto assets, so if the drop continues demand could be hit in 2021. 

These three companies show how broadly cryptocurrencies are now impacting big businesses on the market. There are transaction companies that make money off crypto trading, companies that hold crypto, and the hardware and software companies that are building crypto infrastructure. Like any commodity, they all drop when crypto does. 

Now what

The reality of the market in 2021 is that volatility in cryptocurrencies is part of the market dynamics, especially for companies that have an interest in the asset class. And with a volatile asset like Bitcoin or Ethereum, stocks will inherently be volatile as well. With that said, if crypto assets jump tomorrow these stocks could as well; the volatility works both ways. 

Should you invest $1,000 in Bitcoin right now?

Before you consider Bitcoin, you'll want to hear this.

Investing legends and Motley Fool Co-founders David and Tom Gardner just revealed what they believe are the 10 best stocks for investors to buy right now... and Bitcoin wasn't one of them.

The online investing service they've run for nearly two decades, Motley Fool Stock Advisor, has beaten the stock market by over 4X.* And right now, they think there are 10 stocks that are better buys.

Source: Fool


The views expressed in this article are the author's own and do not necessarily reflect the view of Hotpot Crypto. Hotpot Crypto shall not be held liable under any circumstances for any losses, damages or expenses arising from the use of any content mentioned in this article.

The information contained on this website is provided for informational purposes only, with no warranties, or guarantees made as to the accuracy, completeness or timeliness of it. Hotpot Crypto assumes no liability or responsibility for any errors or omissions in the information contained on this site. We strongly encourage you to conduct your own research before taking any action.

This site may contain copyrighted material, the use of which has not always been specifically authorized by the copyright owner. If you wish to use the copyrighted material from this site for the purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner. Authors or publishers who claim ownership of copyrighted articles reprinted on this website and wish for the content to be removed may email us directly at

If you would like to connect with us about any of the distributed content or other inquiries, please email us at with the relevant documentation.