“The nerves are on edge”: Bitcoin crash hits Wall Street

“Your nerves are on edge”
Bitcoin crash hits Wall Street

Bitcoin temporarily drops to a four-month low of $ 30,000, dragging the US exchanges down with it. But then the mood turns and the Dow Jones makes up for a large part of its interim losses. But investors are also still worried about inflation.

The Dow Jones has expanded its most recent losses, burdened by price losses in crypto stocks. He lost 0.5 percent to 33,896 points, but made up for a large part of his interim losses of up to 1.7 percent. For the market-wide S&P 500, it was 0.3 percent down to 4115 points. The technology-heavy Nasdaq 100, however, saved itself into positive territory and gained 0.1 percent to 13,237 points.

“Today everything revolves around the fall in the price of cryptocurrencies,” said Dennis Dick, chief trader at the brokerage house Bright Trading. “Their crash is having an impact on the stock market, which is already plagued by inflation concerns.”

Bitcoin 39,959.32

Bitcoin temporarily lost a good 30 percent and fell to a four-month low of $ 30,000. The second most important cyber currency, Ethereum, even lost almost half of its value. “The nerves are on edge,” said analyst Timo Emden from Emden Research. “The thought of a total loss may have forced private investors in particular to give up.”

The turbulence in the crypto market drove some investors into the “anti-crisis currency” gold. The gold price was at its highest level since January at times, but came back as the dollar rallied and was finally at the previous day’s level.

China is tightening the crypto screws

The sale was triggered by tightened restrictions on crypto transactions in China. “Other countries could follow suit as the central banks are tinkering with their own digital currencies,” said Neil Wilson, chief analyst at the online broker Markets.com. “So far, western supervisors have been quite relaxed about Bitcoin. That could change soon.”

S&P 500
S&P 500 4,116.05

Against this background, values ​​from the cryptocurrency sector and companies that deal with the blockchain technology underlying Bitcoin & Co flew out of the depots. The shares of Coinbase, Riot and Marathon as well as those of the software company MicroStrategy fell by more than ten percent at times. The latter has invested billions in Bitcoin. The payment processor PayPal and the credit card provider Mastercard, which accept Bitcoin for transactions, also had to give up.

Fed minutes at a glance

So far, the Fed has been assuming a temporary price surge. It had made a “strong set of data” a condition for a reduction in bond purchases. Most recently, however, the US job growth had disappointed and remained well below expectations. According to the minutes of the latest central bank meeting published that evening, some monetary watchdogs were of the opinion that a plan to reduce bond purchases (tapering) could be discussed at one of the upcoming meetings. The prerequisite for this, however, is that the economy continues to recover strongly.

Concerns about inflation also affected commodity prices. The industrial metal copper was down 3.3 percent to $ 10,057 per ton. The US oil type WTI fell just as strongly to 63.34 dollars per barrel (159 liters). Here, the exploding coronavirus case numbers in India and other Asian countries weighed on the mood, said analyst Vandana Hari from research house Vanda Insights. It is currently particularly difficult to estimate the development of demand. With easing on the one hand and new restrictions on the other, the situation is more confusing than ever since the outbreak of the pandemic.

Lowe’s can’t convince, Target is in demand

Lowe’s also came under selling pressure. The hardware store chain increased quarterly sales by almost 26 percent, but did not come close to the 31 percent growth rate of rival Home Depot. In a two-year comparison, however, the two companies were on a par, calculated analyst Michael Baker from research house DA Davidson. Still, Lowe’s shares lost 1.1 percent.

Target stocks, on the other hand, rose 6.1 percent to a record high of $ 218.50. After a jump in sales, the retailer is optimistic about the year as a whole. As with the competition, the quarterly result exceeded market expectations by far, commented analyst Stephanie Wissink from the Jefferies investment bank.

Take-Two Interactive saw an increase of 7.0 percent. The company, which specializes in video games, has significantly exceeded market expectations with its quarterly figures.

In addition, the eyes were on the stock market debut of Squarespace. The provider of web platforms for companies will start trading on the New York Stock Exchange on Wednesday. The issue price was $ 50 per share. This equates to a valuation of $ 6.8 billion. The first rate was $ 48. At the close of trading, the share was only quoted at $ 43.65, a decrease of 12.7 percent on the issue price.

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