Bitcoin experienced a decrease in value on Monday as investors decided to cash in their profits following the cryptocurrency’s rise in December. The price of Bitcoin dropped by more than 7%, reaching $40,887.81, according to Coinbase. This decline followed a significant drop on Sunday night, temporarily reaching as low as $40,300. Last week, Bitcoin had surpassed $44,000 and maintained levels just below that over the weekend.
Ether, another cryptocurrency, also faced a 7% decline on Monday, settling at $2,202.92. Other digital assets like Solana’s SOL token and Ripple’s XRP also saw drops of 7% and about 8%, respectively. According to Coin Metrics, both Bitcoin and Ether are heading for their worst days since August 18 and March 9, respectively.
The crypto market’s downturn affected related stocks. Coinbase shares fell by about 5%, while MicroStrategy experienced a 7% loss. Bitcoin mining stocks, including Riot Platforms and Marathon Digital, saw double-digit declines, with drops of 11% and 12%, respectively. CleanSpark and Iris Energy, two Wall Street favorites, also faced significant decreases of nearly 15% and 14%, respectively.
These market movements followed a 12% increase in Bitcoin during December. The surge was attributed to growing expectations that the U.S. Securities and Exchange Commission might approve the first spot Bitcoin exchange-traded fund (ETF) in early January. Galaxy Digital estimates the potential market size for a U.S. Bitcoin ETF to be around $14 trillion in the first year after launch, growing to about $26 trillion in the second year.
This information is not legal advice. Do your own research before making any decisions. Only invest what you can afford to lose and seek independent financial advice if needed. Understand the risks involved before purchasing any cryptoassets.