Affected by Bitcoin falling below the $80000 mark, European and American cryptocurrency related stocks collectively fell on Friday (28th).
On the US stock market, MicroStrategy Inc (NASDAQ: MSTR), which is heavily invested in Bitcoin, fell 2.2%. The major cryptocurrency exchange Coinbase (NASDAQ: COIN) fell 3.6% due to a decrease in trading activity. Mining companies also suffered setbacks: Riot Platforms (NASDAQ: RIOT) and MARA Holdings both fell 3.4%, Bit Digital fell 3.4%, CleanSpark (NASDAQ: CLSK) fell 2.6%, and Hut 8 fell 3.8%.
European stocks weakened synchronously. Germany's Northern Data (F: NB2) fell 1.8%, Sweden's Safello (ST: SFL) plummeted 6.3%, and Switzerland's Swisquote (SIX: SQN), which provides cryptocurrency trading services, fell 8.8%.
Meanwhile, Bitcoin has fallen 25% from its high. Analysts believe that profit taking and macroeconomic uncertainties such as tariffs and inflation are the main reasons for the market downturn.
The decline in Coinbase stock price is similar to the sharp drop in Bitcoin price. The world's largest cryptocurrency fell 17% during the same period, dropping to a low of around $79000 before rebounding to nearly $84000.
The correlation with Bitcoin is very high, "Dan Dolev, senior analyst of fintech equity research at Mizuho Securities, said in an interview with Fortune, referring to Coinbase's market performance. I would be surprised if there were any other results
Cryptocurrency exchanges are not the only fintech companies experiencing a decline in market value. Robinhood, an online brokerage company that allows retail investors to trade stocks and cryptocurrencies, also saw its stock price drop nearly 30% in the past two weeks, hitting a low of $46 on Tuesday.
The broader stock market is also declining due to President Donald Trump's implementation of a series of tariffs on Canada, Mexico, China, and the European Union. Since mid February, the Nasdaq index has fallen by about 7%, and the S&P 500 index has fallen by about 4%.
Despite the disappointing performance of Coinbase's stock price since its financial report, we attribute this weakness primarily to macroeconomic factors, "Owen Lau, Executive Director and Senior Analyst at Oppenheimer&Co., wrote in a research report on Monday.
The sharp decline in Coinbase's stock price is a sudden reversal for the cryptocurrency company, which had previously surged to a record high of $343 in December.
After the November presidential election, Coinbase and the broader cryptocurrency market experienced the so-called 'Trump effect'. Traders and the cryptocurrency industry are optimistic about the economic and cryptocurrency policies of the incoming Republican president, believing that these policies will drive market development. Bitcoin surged to a record high of over $105000 in mid December.
During the campaign, Trump positioned himself as an ally of the cryptocurrency industry. He calls himself the "crypto president" and has promised the industry that he will eliminate Gary Gensler, the former chairman of the Securities and Exchange Commission (SEC), who was the main figure leading the agency's crackdown on the crypto industry.
The cryptocurrency industry has received full support from the presidential candidate, "Coinbase CEO Brian Armstrong wrote in November, shortly after Trump won the election
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