Cryptocurrency Stocks Slump as China Extends Its Crackdown

·2 min read
Cryptocurrency Stocks Slump as China Extends Its Crackdown

(Bloomberg) -- Cryptocurrency stocks declined after China extended its crackdown to digital currencies, with its central bank saying all crypto-related transactions are illegal.

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Argo Blockchain Plc slumped 10% in London, while Bitcoin miner Northern Data AG lost 2.5% in Frankfurt. In the U.S., Coinbase Global Inc., the cryptocurrency exchange, and retail trading platform Robinhood Markets Inc. each dropped as much as 3.5%. Meanwhile, MicroStrategy Inc. fell as much as 6.7% and Marathon Digital Holdings Inc. declined 8.1%.

The comments by the People’s Bank of China sent cryptocurrencies tumbling, with Bitcoin falling below $41,000 at one point and Ethereum down 8.9% to $2,864. Markets have been on edge as China has tightened its grip on sectors ranging from private education to digital gaming. The debt crisis at property developer China Evergrande Group has added to the tension.

“China authorities are forcing the available liquidity into the real economy,” said Xiadong Bao, an emerging-markets fund manager at Edmond de Rothschild Asset Management. While the move may not be direct fallout from Evergrande, the overall goal of China’s regulatory efforts is “less speculation, for example in property and crypto, and more sustainable development,” Bao said.

The move hammered coins of all sizes, including EOS, Litecoin and Dash. Vital Knowledge’s Adam Crisafulli said he isn’t advocating for investors to buy on the weakness in Bitcoin as China’s attitude toward crypto will likely be adopted by other countries.

Some other stocks with exposure to cryptocurrencies that are under pressure on Friday include:

  • Riot Blockchain Inc. is down as much as 7.4%

  • Bit Digital Inc. -7.8%

  • Ebang International Holdings Inc. -9.4%

  • Future FinTech Group Inc. -5.7%

  • Diginex Ltd. -8.8%

  • Mogo Inc. -6.8%

(Updates share movement throughout and chart.)

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