Reasons for Crypto Stocks' Drops Today.

  Reasons for Crypto Stocks' Drops Today. The fall of Bitcoin and Ethereum is dragging Crypto Stocks with it.  

• What happened

Cryptocurrency shares fell early Thursday, along with most cryptocurrencies themselves. In the afternoon, Bitcoin (CRYPTO:BTC) fell 4.8% to $44,284 in the last 24 hours, while Ethereum (CRYPTO:ETH) fell 6.4% to $3,025.43. Thus, it is not surprising that an exchange like Coinbase Global (NASDAQ:COIN) dropped as much as 7.9% today, while Miners Bitfarms (NASDAQ:BITF) and BIT Mining Limited (NYSE:BTCM) fell 10.3% and 14.9% respectively. As usual, there are many factors driving crypto stocks in the short term.

• So what

A hacker stole $600 million worth of crypto assets in a public heist Wednesday. The hacker said the theft was "for fun" and returned $342 million in Thursday morning reports. Earlier this week, the infrastructure bill passed the Senate and includes provisions to tax cryptocurrencies like other securities and add reporting rules for companies in the industry. If passed, the bill legitimizes the cryptocurrency, which is one of the biggest reasons Bitcoin in particular has soared over the past few weeks.

The fall of Bitcoin and Ethereum is dragging Crypto Stocks with it.

It's also important to keep in mind that the infrastructure bill has yet to become law and could get stuck in Parliament. But if the government decides to tax crypto trading and further legitimizes the industry, it could help boost cryptocurrencies and crypto stocks further over time.

• Conclusion

The highlight of the day is the $600 million cryptocurrency stolen by the hacker. Although touted as safe, the possibility that cryptocurrencies may be stolen by some hackers is worrying. Congress has also revealed some security vulnerabilities in the industry while legitimizing cryptocurrencies. However, in order to truly create value in the long run, security and hacking challenges will need to be addressed by industry.  

Source: The Motley Fool,

 

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