Crypto Stocks Tumble in Premarket as Bitcoin Holds Steady Near $77K
Cryptocurrency stocks slid in premarket trading Monday, extending losses from a weekend selloff triggered by political uncertainty surrounding the Federal Reserve. Bitcoin (BTC), meanwhile, steadied near the $77,000 level after a sharp dip.
The declines came as investors continued to react to former President Donald Trump's Friday announcement nominating Kevin Warsh as his pick for Fed chair. Warsh, known for his hawkish views during his previous tenure as a Fed governor, is seen by some market participants as potentially less favorable to the loose monetary policy that has often buoyed risk assets like crypto.
MicroStrategy (MSTR), the corporate treasury's largest Bitcoin holder, fell more than 6%. Galaxy Digital (GLXY) dropped over 7%, while Bitcoin miners like IREN (IREN) and Cipher Mining (CIFR) shed around 4%. Crypto exchange Coinbase (COIN) also traded roughly 4% lower.
"The market is pricing in a regime shift," said Michael Chen, a portfolio manager at Horizon Capital. "Crypto equities are acting as a high-beta proxy for Bitcoin sentiment, and right now, sentiment is cautious. The Warsh nomination introduces a known quantity, but one whose historical stance on monetary tightening is causing a recalibration."
Market volatility gauges spiked. The Cboe Volatility Index (VIX), often called Wall Street's 'fear gauge,' jumped 10%. The Volmex Bitcoin Implied Volatility Index surged from 40 to 50 over the past week, signaling traders expect larger price swings ahead.
Bitcoin itself proved more resilient, trading up about 1% on the day near $77,000 after briefly touching $74,500 on Saturday. The stabilization coincided with a slight pullback in the U.S. Dollar Index (DXY), echoing the inverse correlation observed last week.
The selloff wasn't confined to crypto. Traditional safe havens also came under pressure, with gold falling 4% to $4,700 an ounce and silver dropping 4% to $82. Oil declined, with West Texas Intermediate futures down 5% to $62 a barrel. In contrast, broad equity index futures pared losses, with the Invesco QQQ Trust (QQQ) down less than 1%.
Market Voices:
"This is a healthy shake-out," commented Sarah Lim, a veteran trader at Apex Financial. "The long-term thesis for Bitcoin adoption isn't broken by one nomination. The equities are just more sensitive to short-term liquidity fears."
"It's sheer panic over a phantom menace," argued David Kroft, an independent crypto analyst, in a more critical tone. "The market is having a tantrum over a nominee who might not even get confirmed. It exposes how fragile and politically reactive this entire asset class still is. We're not seeing smart money flee Bitcoin itself—just the leveraged proxies."
"The volatility spike is the real story," noted Priya Sharma, a risk strategist at Meridian Bank. "Implied vols at 50 mean the options market is braced for a big move. Whether that's up or down next depends on macro data and clarity on the Fed's future composition."