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‘Magnificent seven’ tech stocks tumble a whopping $280B as crypto surges

October 26, 2023 Coin Telegraph

‘Magnificent seven’ tech stocks tumble a whopping 0B as crypto surges

Andrew Lokenauth

Google's parent company Alphabet was the worst performer on the day, falling 9.5% in a massive $180 billion wipeout.

More than $280 billion has been wiped from the “magnificent seven” tech stocks following the release of several earnings reports on Oct. 25, triggering fears of a looming tech recession.

The so-called “magnificent seven” refers to the top seven blue-chip tech firms including Apple, Microsoft, Meta, Amazon, Alphabet, Nvidia, and Tesla — who combine to make up a quarter of the value of the S&P 500 index.

Google parent company Alphabet saw its share price fall over 9%, wiping $180 billion from its market cap and was noted as Google’s worst-performing day since the COVID-19 pandemic hit in March 2020.

*Google’s (Alphabet Inc Class A) share price over the last five days. Source: Google Finance*

The share prices of Amazon, Nvidia, and Meta fell 5.5%, 4.3%, and 4.2% respectively, according to Y Charts.

Apple and Tesla’s fall in share prices were less severe at 1.35% and 1.9%, while Microsoft was the only one of the seven to buck the trend, with its share price rising 3.1% after reporting better-than-expected growth in its Azure business.

“This is the most widespread tech selloff in months which has resulted in a 5-month low for the S&P 500,” Kobeissi said.

“This is what happens when the few stocks that are holding up the entire market break," the firm said, adding that tech stock investors may be beginning to price-in a recession.

“It seems like buyers are becoming more hesitant as headwinds accumulate,” Kobeissi noted in a follow-up response.

Fears of a “stock market crash” have also been reflected in Google search trends, with the three-word term up 233% over the last week, noted Andrew Lokenauth, a reporter for TheFinanceNewsletter.com.

Google searches for Stock market crash up 233% in past week.

If the stock market crashed 10%, what stocks are you investing in? pic.twitter.com/TQz8tVyL5U
— Andrew Lokenauth | TheFinanceNewsletter.com (@FluentInFinance) October 24, 2023

On the other hand, the cryptocurrency market has been trending upwards amid optimism over possible spot Bitcoin ETF approvals in the United States, with market cap increasing 16.3% to $1.3 trillion over the last week, according to CoinGecko.

Bitcoin (BTC) Ether (ETH), Binance Coin (BNB) and XRP in particular have increased 23.3%, 16.7%, 8% and 15.2% respectively over the last seven days.

However, the crypto market hasn’t proven to be bulletproof in face of tough macroeconomic conditions.

When the United States real gross domestic product decreased over the first two quarters of 2022, the cryptocurrency market cap fell 61.7% from $2.37 trillion to $907 billion, according to CoinGecko.

*Change in the cryptocurrency market cap over the last 60 days. Source: CoinGecko*

While analysts speculate whether Bitcoin will decouple further from tech stocks and the S&P 500, past research from the Multidisciplinary Digital Publishing Institute suggests Bitcoin still tends to trade like a “tech stock” over the long term — due to its extreme volatility.

It can, however, serve as a viable hedge against the U.S. dollar, which it’s negatively correlated to, the research firm deduced from an Oct. 2022 report.

Since Sept. 1, Bitcoin has decoupled from the NASDAQ 100, increasing 34% while the NASDAQ has fallen 8.6% over the same time frame.

Meanwhile, the recent investor movements have some observers hinting that the movement could be seen as a “flight to safety” toward Bitcoin — particularly in light of several banking stocks plummeting lately.

It’s almost like I predicted that #crypto would decouple from stocks. And here we are with tech #stocks sinking and #bitcoin rallying. https://t.co/K1R3OIiOgV
— Bryan Ross (@bryanrosswins) October 25, 2023

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GBTC Bitcoin ‘discount’ may be gone by 2024 as share price gains 17%

August 30, 2023 Coin Telegraph

Bitcoin

GBTC shares trading at a lower implied value to BTC price may soon be a thing of the past, a new prediction says.

Bitcoin (BTC) investment vehicle, the Grayscale Bitcoin Trust (GBTC) could erase its BTC price “discount” in 2024.

In an X post on Aug. 30, monitoring resource CoinGlass predicted that the so-called “GBTC premium” would soon return.

GBTC price: From "elevator to hell" to "stairway to heaven?"

Grayscale netting a court victory over United States regulators on Aug. 29 provided an instant remedy to what was flagging GBTC performance.

The fund, which contains over 600,000 BTC, has traded at a discount to the Bitcoin spot price, also called net asset value (NAV), since February 2021.

What was once the “GBTC premium” has thus been negative for over two-and-a-half years, but that could soon change.

News that the U.S. Securities and Exchange Commission (SEC) must consider GBTC’s conversion to a Bitcoin spot price exchange-traded fund (ETF) on the same terms as other applicants sent the “discount” to its lowest levels since December 2021.

At just -17%, it is now less than half of what it was at the peak, when it neared 50% in what was once called an “elevator to hell.”

“Expect Grayscale $GBTC premium to close the discount next year,” CoinGlass wrote in part of subsequent commentary.

*GBTC premium vs. asset holdings vs. BTC/USD chart (screenshot). Source: CoinGlass*

Noting the size of its assets under management (AUM), Dylan LeClair, senior analyst at digital asset fund UTXO Management, reflected on the impact that GBTC had in shaping Bitcoin’s run to current all-time highs.

“Don't forget how large $GBTC is. They hold >600k BTC, and was the single largest driver of the 2021 bull run from a flows standpoint,” he told X subscribers on Aug. 29.

“Today's discount move from -26% to -17% is the equivalent of 56,000 BTC returning to the AUM of $GBTC if shares are marked to market.”

*GBTC Bitcoin holdings data. Source: Dylan LeClair/X*

BTC price dices with crucial support reclaim

Eyeing the implications of the Grayscale news for BTC price action, meanwhile, market participants flagged the potential return of some key moving averages (MAs).

#bitcoin now reclaiming its 200WMA and 200DMA after court rules in favor of Greyscale over SEC. pic.twitter.com/4EIqii92ps
— Philip Swift (@PositiveCrypto) August 30, 2023

Chief among these are the 200-week and 200-day trend lines, both of which failed to act as support during Bitcoin’s descent to multi-month lows earlier in August.

Data from Cointelegraph Markets Pro and TradingView nonetheless showed BTC/USD struggling to hold either level — despite the previous daily candle closing above them.

*BTC/USD 1-day chart with 200-day, 200-week MA. Source: TradingView*

Continuing on the topic, popular trader and analyst Rekt Capital reiterated that several MAs remained an essential reclaim target for bulls.

In an X post, he referenced the potential bullish invalidation of Bitcoin’s double top structure on weekly timeframes.

“This is great initial momentum from ~$26K support which never brokedown to fully confirm the Double Top,” part of his analysis read.

“That said, $BTC needs to reclaim the Bull Market moving averages as support to be in the clear.”

*BTC/USD annotated chart. Source: Rekt Capital/X*

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Bitcoin miner Riot Platforms trims Q2 loss to $27.7M

August 9, 2023 Coin Telegraph

bitcoin miner

The firm managed to narrow net loss in the quarter as it ramped up Bitcoin production.

Colorado-based Bitcoin mining firm Riot Platforms narrowed its second quarter net loss to $27.7 million as it ramped up its Bitcoin production and reached record hash rate capacity.

The crypto miner posted total revenue of $76.7 million — up 5.2% from Q2 2022 — which was primarily driven by a 27% year-on-year increase in Bitcoin (BTC) production, offset by a decline in Bitcoin prices, according to the firm’s Aug. 9 results filing.

The firm’s mining revenue of $49.7 million attributed to 64.7% of the firm’s total revenue over the quarter. An additional $13.5 million was made through the firm’s power curtailment credits.

Meanwhile, its Q2 net loss was a massive reduction from the prior year period, which was $353.5 million. It was also around half the net loss posted in the first quarter of 2023.

*Riot Platforms managed to cut its net loss to $27.7 million in Q2. Source: Riot Platforms*

The firm produced 1,775 Bitcoin in the quarter, while its average cost to mine a Bitcoin (BTC) was $8,389 in Q2, beating beat Q1’s average price.

The mining firm also reached an all-time high hash rate capacity of 10.7 exahashes per second and anticipates this figure will reach 20.1 EH/s by the second quarter of 2024, before reaching 35.4 EH/s in 2025.

The estimates come following its purchase of 33,280 mining rigs in late June, with the 35.4 EH/s figure assuming that Riot will exercise its right to purchase an additional 66,560 miners at the same price and terms at some time in the near future.

*Riot predicts the facility's hash rate capacity to increase from 10.7 EH/s at current levels to 35.4 EH/s in 2025. Source: Riot Platforms*

Despite Riot’s share price falling 4.42% earlier in the day, its share price fell another 0.86% in after hours, shortly after the firm’s results were released.

*Riot’s share price fell 0.86% to $16.34 in after hours trading. Source: Google Finance*

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Cathie Wood’s ARK loads up crypto bags, buys $19.9M Block shares

June 9, 2023 Coin Telegraph

Cathie Wood’s ARK loads up crypto bags, buys .9M Block shares

Ark Invest

Just days after buying $21 million of Coinbase shares, ARK Invest CEO Cathie Wood has added another $19.9 million in Block Inc. shares across its ETFs.

ARK Invest CEO Cathie Wood doesn’t appear to have been swayed by recent crypto regulatory action, buying another $19.9 million shares of Block Inc. right after buying $21 million in Coinbase stock.

Wood’s latest buying spree comes despite the United States Securities and Exchange Commission this week suing two of the industry’s exchange heavyweights, Binance and Coinbase, for offering what the regulator considers to be unregistered securities, among other things.

Coinbase's share price has been depressed in the days following the SEC lawsuit, however, Block Inc.'s shares saw a sharp rise in that same time period.

ARK Invest’s 305,573 new shares of Block came across six buys between June 7-8, which now represents ARK’s fourth largest holding at 4.81%, according to ARK Invest Daily Trades.

Of the new shares, 240,174 were added to its ARK Innovation (ARKK) ETF, 39,099 shares to ARK Next Generation Internet (ARKW) and the remaining 26,300 shares to ARK Fintech Innovation (ARKF).

As for Coinbase, ARK Invest bought 419,324 shares — worth about $21.6 million — across three buys on June 6, which came in the midst of COIN plummeting nearly 20% overnight on June 5.

While many consider the lawsuits to have harmed the crypto firms, Wood recently told Bloomberg that the tougher charges laid against Binance may eventually work in Coinbase’s favor:

“We have Binance under increasing regulatory scrutiny for more criminal activities, fraud being one of them, therefore we have the competition for Coinbase disappearing, so that’s a good thing longer term for Coinbase.”

Coinbase is now ARK Invest’s seventh largest holding at 4.39%, with its total of 11,440 COIN shares spread across its ARKF, ARKK and ARKW ETFs, according to Cathie’s ARK, a website devoted to tracking her portfolio.

Since Q1, ARK Invest has increased the number of COIN shares by 8.2% — which comes on the back of 20.2% and 25.2% increases in Q4 2022 and Q1 this year, according to the website.

Because of regulatory uncertainty, innovation seems to be leaving the US for more friendly regimes. Unfortunate. I believe it will become an election-year issue. https://t.co/PvqK9W27Fd
— Cathie Wood (@CathieDWood) June 4, 2023

While Wood is becoming increasingly bullish on Coinbase, she believes the SEC’s regulation by enforcement approach has taken a toll on cryptocurrency innovators in the U.S.

The tech-savvy CEO is ultra bullish on Bitcoin (BTC) over the long term too.

In the Bloomberg interview, Wood explained that Bitcoin was built to thrive during times of market turbulence and regulatory uncertainty: