Crypto stocks suffer after spot bitcoin ETF approvals

MicroStrategy, Coinbase, and bitcoin mining stocks have suffered following the approval of spot-based bitcoin ETFs.

MicroStrategy, a firm whose core competency is supposed to be ‘business intelligence,’ has previously attracted interest from cryptocurrency investors as they have converted a meaningful portion of their corporate treasury to bitcoin. Its executive chairman, Michael Saylor, who previously settled with the Securities and Exchange Commission (SEC) over allegations of accounting fraud, has publicly advocated for Bitcoin.

MicroStrategy suffered in trading on Thursday, falling 5% and wiping out around $400 million in market capitalization.

Chart from TradingView.

Coinbase, the largest publicly traded cryptocurrency exchange, lost approximately 6.5% in value, wiping nearly $2 billion off the market capitalization.

Coinbase is simultaneously the custodian for many of the newest Bitcoin ETFs and is currently facing a lawsuit from the SEC alleging they have sold and facilitated trading in unregistered securities.

Chart from TradingView.

Read more: Crypto reacts to SEC’s dramatic spot bitcoin ETF approvals

Several bitcoin mining firms, including Marathon and Riot, suffered, falling 16% and 13% respectively. Internationally, Argo Blockhain, based out of the UK, saw its value plummet approximately 18% on Thursday before continuing to fall this morning.

Phoenix Group, based out of Abu Dhabi, fell about 1%. Iris Energy, a beleaguered Australia-based miner that’s struggling to pay its debts, also saw its value plummet by 6%.

Block, formerly Square, suffered immediately at the open. It fell around 3% before recovering almost all of the losses.

The spot-based ETFs have already passed the futures-based ETFs in total volume. The Block, citing data from Yahoo Finance, shows that the spot-based ETFs have already reached nearly 70% of the volume.

Chart from The Block.

Read more: SEC commissioner Crenshaw still skeptical of approved bitcoin ETFs

The new spot-based bitcoin ETFs appear to be a more compelling way for certain classes of investors to gain exposure to bitcoin compared to these other firms. SEC chair Gary Gensler issued a statement following approval of these ETFs where he stated, “While we approved the listing and trading of certain spot bitcoin ETP shares today, we did not approve or endorse bitcoin.

Investors should remain cautious about the myriad risks associated with bitcoin and products whose value is tied to crypto.”

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