US-listed Crypto stocks retreat after Trump-fueled surge

Crypto reaction global: Shares of New York-listed cryptocurrency firms declined on Monday as Bitcoin (BTC) fell after surpassing the $70,000 mark for the first time since mid-June. This sell-off wiped out earlier session gains driven by Republican presidential candidate Donald Trump's pro-crypto speech, which had initially boosted stocks.

Bitcoin, known for its volatility, often experiences pullbacks after hitting key milestones as investors take profits. Despite this, the crypto industry welcomed Trump's promise of more favorable regulation.

Bernstein analysts noted in a report, "Any 'Trump trade' into the US election should include greater allocation to Bitcoin and Bitcoin-linked stocks."

Trump has positioned himself as the pro-Bitcoin candidate ahead of the November election, which could be a significant advantage for an industry that has criticised the current administration's regulatory approach.

Volatility and speculative nature

Securities and Exchange Commission (SEC) Chair Gary Gensler has warned about the volatility and speculative nature of cryptocurrencies like Bitcoin. Trump stated that he would fire Gensler on his first day in office and proposed creating a national "stockpile" of Bitcoin using crypto assets seized in law enforcement actions.

However, some experts urged caution. CoinCorner CEO Danny Scott remarked, "The Bitcoin strategic reserve for the U.S. is a major milestone for Bitcoin, however, it will still require Trump to win."

Crypto exchange Coinbase's shares (COIN.O) ended 3.6 per cent lower after an earlier rise of up to 5 per cent. Miners Bitfarms (BITF.O), Riot Platforms (RIOT.O), and CleanSpark (CLSK.O) saw declines of between 4.9 per cent and 5.2 per cent after initial gains. Michael Saylor's MicroStrategy (MSTR.O), a prominent Bitcoin supporter, also closed 3.9 per cent lower.

Despite the day's market movements, global sentiment towards Bitcoin remains "incredibly positive" for 2023, with many anticipating the next bull run in 2024-25. The cryptocurrency has transitioned from the financial fringes to mainstream acceptance, bolstered by institutional investor support and the approval of exchange-traded funds linked to the spot prices of Bitcoin and Ether.

(With Reuters inputs)