It is well known that as Bitcoin (BTC) progresses, the same goes for the rest of the cryptocurrency market, as time and time again, large Bitcoin price movements create ripples in the altcoin market, affecting the feeling and momentum.
This appears to be the same for blockchain-related stocks that are traded on traditional financial markets, and a quick look at the charts shows that they have reflected the performance of Bitcoin in recent months.
The cryptocurrency ecosystem was booming just over a month ago when Coinbase’s long-awaited stock price finally arrived on April 14, a date that also marks the most recent all-time high in the price of BTC at $ 64,863.
Since its debut, COIN’s price has steadily declined below its direct listing price of $ 381 and its reference price of $ 250 to a current value of $ 245, coinciding with a roughly 35% drop in the price of BTC, which has also exerted pressure. in other blockchain-related stocks, including Riot Blockchain and Marathon Digital Holdings.
BTC / USDT vs. COIN / USD vs. RIOT / USD vs. MARA / USD 4-hour chart. Source: TradingView
COIN’s struggles since its launch, which have resulted in its valuation falling from a high of $ 100 billion to its current valuation of $ 49 billion, have centered on concerns about whether or not the exchange will be able to reach the Future earnings expectations in the face of a growing competitive landscape, with new centralized and decentralized players emerging weekly and looking for a piece of the action.
Matthew Wheeler, Global Head of Market Research at Forex.com, recently highlighted the increasingly competitive landscape Coinbase now faces as cryptocurrency adoption increases on a global scale.
“While Coinbase has been able to rely on its first mover advantage and brand familiarity thus far, margins will continue to compress due to competition with ‘CeFi’ brokerages like BlockFi and ‘DeFi’ alternatives like Uniswap “.
These concerns have led some analysts, including New Constructs CEO David Trainer, to warn that COIN’s price could fall below $ 100:
“Investors should expect the shares to continue to underperform, as the shares could fall to $ 100 or less as it becomes clear that the company is unlikely to meet future earnings expectations included in the price of the shares. Actions”.
Bitcoin sell off spreads
While the struggles COIN is facing can be attributed to it being a newly listed stock still seeking to establish its fair market value, the downward trends in Riot Blockchain and Marathon Digital Holdings, which outperformed BTC in 2021, also demonstrate the effect that a distressed BTC price has on cryptocurrency-related stocks.
A survey of financial markets in general indicates that the general pullback in the tech sector and concerns related to rising inflation have further hampered price growth in blockchain-related stocks, and there is little sign that these pressures they will be resolved in the short term.
RIOT and MARA prices have followed Bitcoin price movements since the bull market of 2017-2018, so further price growth for these and other blockchain-related stocks is likely to depend on how BTC performs on the market. future.
It is curious to note that the price of RIOT and MARA rallied earlier than Bitcoin in 2021 to reach new all-time highs, indicating the possibility that they can be used as a leading indicator for future price movements for BTC and altcoins while the market is offered. traditional. Investor exposure to the asset class without having to hold cryptocurrencies directly.
However, depending on how the market develops in the future, it should be noted that Bitcoin remains the dominant market indicator for all things blockchain and cryptocurrencies, that is, as BTC progresses, so does the rest. From the market.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every trade and investment move involves risk, and you should do your own research when making a decision.