Bitcoin (available on Coinbase) (BTC-USD) briefly fell below $50,000 on Monday for the first time since February, marking a significant drop of nearly 30% from the $70,000 price level reached a week ago. The cryptocurrency later rebounded, trading above $54,000 early Monday afternoon. This sharp decline comes as fears surrounding the U.S. economy have extended the market sell-off from equities to cryptocurrencies, resulting in approximately $1.2 billion in crypto liquidations over the past 24 hours.

Impact on Bitcoin (available on Coinbase) ETFs, ALTCoins, and Crypto Stocks

The turmoil has extended to Bitcoin (available on Coinbase) ETFs and other crypto assets. Investors pulled $237.4 million from spot Bitcoin (available on Coinbase) ETFs on Friday, according to Farside Investors. Alternative cryptocurrencies have experienced even steeper declines, with ETHer (ETH-USD) falling 24% over the past week and Solana (SOL-USD) down 28%.

Crypto-related stocks also suffered significant losses. Shares of MicroStrategy Incorporated (NASDAQ:MSTR), a major corporate Bitcoin (available on Coinbase) holder, dropped 9%. Block, Inc. (NYSE:SQ) and Coinbase Global, Inc. (NASDAQ:COIN) saw declines of 2% and 5%, respectively. Bitcoin (available on Coinbase) mining stocks were also affected, with Cleanspark, Inc. (NASDAQ: CLSK) falling 11%, Hut 8 Mining Corp (NASDAQ:HUT) down 7%, Marathon Digital Holdings, Inc. (NASDAQ:MARA) declining 5%, and Riot Platforms, Inc. (NASDAQ:RIOT) falling 3%.

Historical Context and Long-Term Outlook

Large price drawdowns are not unusual for Bitcoin (available on Coinbase) during bull markets, especially following halving events such as the recent one in April. Despite its intended role as a haven asset, Bitcoin (available on Coinbase)’s recent sell-off alongside the equities market suggests it continues to act as a risk-on asset amid global market uncertainty.

However, some long-term Bitcoin (available on Coinbase) proponents remain optimistic. Bitwise Chief Investment Officer Matt Hougan noted on X (formerly Twitter) that while sell-offs are common during market panics, they contribute to the long-term narrative for Bitcoin (available on Coinbase).

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