US crypto stocks fall after Trump-fueled surge

Shares of crypto companies listed in New York fell today as bitcoin fell after breaking above $70,000 for the first time since mid-June.

The sell-off erased earlier gains in the session, as optimism fueled by Republican presidential candidate Donald Trump’s pro-crypto speech sent stocks higher.

The volatile cryptocurrency has often seen pullbacks after hitting major milestones as investors booked profits. However, the industry cheered Trump’s promise of friendlier regulation.

“Any ‘Trump trade’ ahead of the US election should include a greater allocation to bitcoin and bitcoin-linked equities,” Bernstein analysts wrote in a note.

The former president has projected himself as the pro-bitcoin candidate for the November election. His return could be a huge win for the industry, which has often complained about excessive oversight and a hostile regulatory environment under President Joe Biden.

Still, Gary Gensler, chairman of the Securities and Exchange Commission and the Biden administration’s top crypto enforcement official, has warned investors about the massive volatility and speculative nature of tokens like bitcoin.

On Saturday, Trump said he would fire Gensler “on day one,” adding that his administration would create a national “stockpile” of bitcoin using the crypto currently held by the U.S. government, much of which has been seized in law enforcement operations.

But some warned against excessive optimism.

“The US strategic reserve bitcoin is a major milestone for bitcoin, but it still requires a Trump victory,” said CoinCorner CEO Danny Scott.

Shares of crypto exchange Coinbase closed down 3.6% after rising as much as 5% earlier in the session. Miners Bitfarms, Riot Platforms and CleanSpark closed down between 4.9% and 5.2% after rising earlier.

Top Bitcoin financier Michael Saylor also closed with MicroStrategy down 3.9%.

However, global sentiment towards bitcoin has been “incredibly positive this year,” he added.

“This sets the stage for what many see as the next boom for 2024-2025.”

Crypto has quickly moved from the financial world to the mainstream, thanks in part to the support of institutional investors and the approval of ETFs tied to the spot price of Bitcoin and Ether.