Cryptocurrency-related stocks took a downturn on Thursday, even after Bitcoin reached a historic milestone, surpassing $100,000 for the first time. MicroStrategy, a software company that has become closely associated with Bitcoin due to its large holdings of the cryptocurrency, saw its stock slip by 4.8%, reversing an earlier gain of more than 7%. Other crypto-linked companies also experienced losses, with Riot Platforms and Mara Holdings falling around 5% and 4%, respectively. Robinhood Markets and Coinbase Global also saw declines, with drops of 2.7% and over 3%, respectively.
MicroStrategy has increasingly become a proxy for Bitcoin itself, with the company’s stock price closely tied to the value of the cryptocurrency. Since 2020, when it first began purchasing Bitcoin, MicroStrategy’s stock has skyrocketed by more than 2,700%. Similarly, Coinbase, which operates a cryptocurrency exchange, and Robinhood, which allows users to trade Bitcoin, have seen their stocks rise due to their exposure to the digital currency. Meanwhile, Mara Holdings and Riot Platforms focus on Bitcoin mining and digital infrastructure.
Despite Thursday’s setbacks, these companies have posted significant gains year-to-date. MicroStrategy has surged nearly 512%, Robinhood has risen more than 205%, and Coinbase has increased by over 84%. Mara Holdings, however, has underperformed, with a gain of just over 5%.
Investor enthusiasm around Bitcoin has been fueled by expectations of a more crypto-friendly regulatory environment following the November election of President-elect Donald Trump. The belief that his administration would be more relaxed on cryptocurrency regulations has led to increased investments in the sector.
“This price surge, particularly with Bitcoin reaching $100,000, is significant not only as a psychological milestone but because it increases the likelihood of more institutional and traditional finance investment,” said Pascal St-Jean, CEO of 3iQ. St-Jean further noted that the growing accessibility of digital assets to investors also contributed to the price appreciation.
In addition, traders have shown increased interest in leveraged MicroStrategy exchange-traded funds (ETFs), which use debt to amplify potential gains from the underlying assets. According to JPMorgan, these leveraged ETFs accounted for a significant portion of the $11 billion inflow into crypto funds in November, reflecting the heightened investor activity in the cryptocurrency sector.