Major Crypto Stock Selloff Hits Market
Crypto-related stocks experienced significant declines on Wednesday, with bitcoin mining companies that had been riding the artificial intelligence infrastructure wave taking the hardest hits. The selloff was broad-based and affected nearly every corner of the crypto stock universe.
Bitfarms, Cipher Mining, Hut 8, and HIVE all dropped between 10% and 15% during early trading hours. Galaxy Digital, the digital asset investment firm that’s been expanding its data center operations, fell 15%—completely wiping out all the gains it had made following Tuesday’s earnings report.
Mining Sector Takes Heavy Losses
The CoinShares Bitcoin Mining ETF, which serves as a proxy for the mining sector, dropped 7%. This steep decline in bitcoin miners suggests that their multi-month rally, which had been fueled by investor optimism about securing lucrative data center deals, has fizzled out as markets turned risk-off.
Looking at the numbers, the combined market capitalization of companies related to AI and high-performance computing had exceeded $95 billion at the peak of the bull run. According to Farside data, that figure has since declined to around $82 billion. Bitfarms, for instance, had surged more than 400% from September but has since fallen about 40%, now trading just above $4 per share. IREN, which was up roughly 400% year to date and 200% since September, is down around 30% from its all-time high of $73, currently trading near $52.
Broader Crypto Market Impact
The selloff wasn’t confined to mining stocks either. Bakkt Holdings, which had surged over 300% earlier this month, sank another 7.5% and is now down almost 40% in just one week. MicroStrategy, the world’s largest corporate bitcoin holder, slipped 4% to below $290.
Other major crypto names like Coinbase, Robinhood, Bullish, and Gemini all experienced sharp losses in the 5%-6% range. The broader crypto market remained under pressure, with bitcoin holding at the $108,000 area but still significantly lower after touching $114,000 on Tuesday.
This market movement reflects what I think might be a broader shift in sentiment toward crypto-related investments. The rapid gains we’ve seen in recent months, particularly in mining stocks that were benefiting from AI infrastructure hype, appear to be facing a reality check. It’s interesting how quickly sentiment can change in this space—one day everyone’s optimistic about data center deals and AI potential, and the next day we’re seeing double-digit percentage drops.
The decline across such a wide range of crypto stocks suggests this isn’t just about individual company performance. There seems to be a broader risk-off sentiment affecting the entire sector. Perhaps investors are taking profits after the substantial gains we’ve seen, or maybe there are concerns about regulatory developments or broader market conditions.
What strikes me is how interconnected these moves are—when bitcoin miners fall, other crypto stocks tend to follow, even if their business models are quite different. It shows how the crypto market still moves as something of a single entity, despite the diversification we’ve seen in recent years.
