The Nvidia stock crash on Monday caused significant turbulence across financial markets, including the cryptocurrency sector.
Nvidia’s 17% drop triggered a 3% decline in the Nasdaq index, which rippled into crypto-related stocks and Bitcoin futures.
Bitcoin Futures Hit by Risk-Off Sentiment
CME Bitcoin futures saw a sharp reaction, with the basis falling into negative territory for the first time since August 2023. This reflects traders de-risking amidst broader market instability. Open interest (OI) on Bitcoin futures witnessed a historic drop, with a daily decline of 17,225 BTC in notional value.
The sharp sell-off appears to stem from risk-off sentiment rather than crypto-specific factors. Bitcoin prices stabilized above $102,000, with more call options than puts indicating cautious optimism. This week may reveal whether BTC’s correlation with traditional markets weakens, particularly if favorable regulatory developments offer some relief.
Crypto Stocks Plunge
Crypto-linked stocks were not spared. Core Scientific experienced a 29% drop, while mining companies like Hut 8, Riot Platforms, and Cipher Mining also suffered significant losses.
These companies have been transitioning to high-performance computing data centers, increasing their reliance on AI technologies. Nvidia’s struggles have made this integration more volatile.
Metaplanet’s Historic Bitcoin Move
In a brighter spot for crypto markets, Metaplanet, a Japanese hotel investor, announced the largest bitcoin-focused capital raise in Asian equity market history. The company raised ¥116 billion ($745 million) by issuing 21 million shares through 0% discount moving strike warrants.
This move is part of Metaplanet’s “Bitcoin-first, Bitcoin-only” strategy to increase its holdings amidst Bitcoin’s record highs and yen devaluation. Metaplanet, which holds 1,762 BTC, saw its shares rise 3% on the day and 16% year-to-date.
