Crypto Stocks Tumble After Bitcoin Falls on Higher-Than-Estimated Inflation
Digital asset miners were among the worst performers on Tuesday.
Crypto-linked stocks fell after U.S. inflation in August came in higher than expected and bitcoin tumbled more than 7% on Tuesday.
The shares of crypto miners, which are most exposed to the price swings of the digital currencies they mine, were the worst hit. Stocks of some of the largest, such as Core Scientific (CORZ), Riot Blockchain (RIOT) and Marathon Digital (MARA), fell by more than 7% in early U.S. trading.
The shares of other companies such as software vendor MicroStrategy (MSTR) and crypto exchange Coinbase (COIN), also tumbled, with each losing more than 8%.
Traders view the consumer price index report as a key indication of whether the U.S. Federal Reserve is likely to raise rates by another 75 basis points, or 0.75 percentage point, when it meets next week. The Fed raised rates by that amount in each of its last two meetings.
The S&P 500 index has fallen about 17% and Nasdaq fell 26% this year, while bitcoin has lost more than 50% as higher inflation has led the Fed to raise interest rates, causing most asset classes to decline in value.
"[With recent CPI numbers] Hopes of a soft landing, the end of the Fed hiking cycle, and a resilient consumer, are fading away," wrote Oanda's senior market analyst, Edward Moya. "Bitcoin’s plunge reminded traders it remains the ultimate risky asset and is vulnerable if stock market selloff deepens," he added.
UPDATE (September 13, 16:40 UTC): Updates share price performance and added analyst comment.
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