Nvidia’s Market Shock Triggers Crypto Turmoil: What’s Next for Bitcoin?

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.

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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.

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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.

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