The recent rally in cryptocurrency-related stocks lost momentum shortly after gaining traction as Bitcoin retraced from its brief ascent above the $90,000 mark. Currently, Bitcoin is trading at approximately $86,500, reflecting a decline of about 3.9% within the last hour. This downturn has extended across other prominent cryptocurrencies, with Ether dropping 5.3% to around $2,850 and XRP decreasing 4.1% to nearly $1.89. Overall, the broader crypto market, tracked by the CoinDesk 20 (CD20) index, has registered a decline of 1.5% for the day.
This pullback has had a notable impact on cryptocurrency miners. MARA Holdings saw a reversal of its earlier gains, now down 4.8% for the day, while Core Scientific faced a steeper decline of 6%. CleanSpark, which had performed well earlier, relinquished all of its gains, trading down 0.38%. Riot Platforms experienced a minor decline of 0.7%.
In the trading and crypto services sector, stocks also experienced a drop. Circle Internet, the issuer of the USDC stablecoin, fell by 3.2%. MicroStrategy, noted as the largest corporate holder of Bitcoin, declined by 2%, and Galaxy Digital slipped 1.9%. Crypto exchange Coinbase also recorded a modest dip of 0.55%.
Despite the general market retracement, Hut 8 has emerged as a notable exception, witnessing a surge of 20% in early trading. This spike came on the heels of a significant announcement regarding a 15-year, $7 billion lease agreement with AI infrastructure firm Fluidstack, leaving Hut 8 still up over 12% as trading progresses.
The reversal in crypto prices comes amidst comments from Federal Reserve Governor Chris Waller, who has emerged as a potential successor to Jerome Powell as chair of the Federal Reserve. Waller presented a cautious viewpoint regarding interest rates, indicating that job growth appears to be stagnating. Despite this, predictive markets on platforms like Polymarket and Kalshi suggest that there is more than a 70% chance of no rate reduction occurring in January, a sentiment mirrored by the CME’s FedWatch tool.
