A sea of red ink washed over the market today as cryptocurrency stocks found themselves on the bad end of a Bitcoin (BTC-USD) sell-off. Coinbase (NASDAQ:COIN), Marathon Digital Holdings (NASDAQ:MARA), Riot Platforms (NASDAQ:RIOT), and Microstrategy (NASDAQ:MSTR) all found themselves down in Friday afternoon’s trading to varying degrees thanks to Bitcoin’s latest plunge.
Don't Miss our Black Friday Offers:
- Discover the latest stocks recommended by top Wall Street analysts, all in one place with Analyst Top Stocks
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
A combination of multiple headwinds and surging liquidation figures emerged to hamstring Bitcoin, and with great effect. Bitcoin lost as much as 7.7% at one point in Friday afternoon’s trading, taking it to lows not seen since June. It’s off its lows for the day as of this writing, but it’s still down significantly over what it was yesterday and makes clearing $30,000 look like a pipe dream. As for the headwinds, there were several: start with increasing government regulation—again—and throw in a growing weakness in the Chinese economy, as evidenced by its recent real estate kerfuffles. That adds up to bad news all around, particularly for Bitcoin.
That combination of factors alone might be reason to sell off en masse, but other causes were bandied around. There was the idea that Elon Musk’s SpaceX sold off all its Bitcoin, causing the rush for the exits. But the reports about SpaceX’s sale came out well before this plunge, so that’s unlikely. There was the recent bankruptcy of China Evergrande, as well as a missed debt payment from Country Garden and from Chinese trust Zhongrong. But these are likely little more than contributing factors, each a problem in its own right, but adding up to a condition where being liquid will likely be more valuable than not.
Marathon Digital took the hardest hit today, but, despite its impressive upside potential, it’s actually the second lowest of the four aforementioned stocks. It’s a Moderate Buy, and with an average price target of $16.50, it comes with 44.74% upside potential. Meanwhile, Riot Platforms was hit the third-hardest, but it’s got the best upside. It’s a Strong Buy, and with an average price target of $20.19, it offers 79.63% upside potential.
