Disclaimer: The opinions expressed by our writers are their own and do not represent the views of U.Today. The financial and market information provided on U.Today is intended for informational purposes only. U.Today is not liable for any financial losses incurred while trading cryptocurrencies. Conduct your own research by contacting financial experts before making any investment decisions. We believe that all content is accurate as of the date of publication, but certain offers mentioned may no longer be available.
When markets feel the heat, the contrasts between them become clear right away. Popular crypto analyst Will Clemente perfectly highlighted this gap amid the latest shake out.
The fact is that gold has central banks that rush to add to reserves, and stocks are cushioned by pension and sovereign funds that love to compound, but crypto has none of that. The only names associated with it on public markets are the ones that crash at the same time as the coins themselves.
Bitcoin dipped to around $110,700 today on a U.S. jobs data mess, but the companies most exposed to it slipped at the same time. Strategy is down 1.47%, BMNR lost more than 5%, Coinbase dropped over 4% and SBET slid almost 7%.
These are supposed to be the closest thing to institutional exposure for digital assets, but during sell-offs, they do not buy — they bleed.
"When sell-off hits"
Today's situation looked even worse on the derivatives side. In just 24 hours, there were more than $371 million in liquidations, split between $230 million in longs and $141 million in shorts.
In just the first hour after the report came, a whopping $117 million was gone, showing how easily things can fall apart when there is no deep capital backing it up.
Every part of the day brought new sales, and by the end, both the bulls and the bears had lost hundreds of millions. Meanwhile, S&P 500 and Nasdaq renewed all-time highs.
The comparison is simple but hard to ignore. Gold is used by central banks, stocks are used by retirement funds and crypto is used by companies that have the same price chart. When Bitcoin drops, they sell off too, leaving nothing behind to slow the fall.
Dan Burgin
Vladislav Sopov
U.Today Editorial Team