Crypto-linked stocks drop after bitcoin sank to one-year low

Shares of several cryptocurrency-related companies in Asian markets fell Thursday, following earlier losses among US names after bitcoin led a sell-off in digital currencies.

Monex, which owns the Japanese exchange Coincheck, and SBI each fell more than 2% to close at two-week lows in Tokyo, while Vidente and Omnitel ended the day down at least 7% in Seoul to lead declines among crypto-linked stocks.

Blockchain-related stocks in the US earlier fell in Wednesday trading. Ideanomics plunged 49%, the fintech firm’s biggest one-day loss since 2010, after reporting worse third-quarter results compared with a year ago due to infrastructure costs and new executive team hires. Xunlei depositary receipts tumbled 13%.

Bitcoin, the largest cryptocurrency, plunged as much as 15% during US trading hours, and was steady at $5 571.18 as of 8:27 am in London, according to consolidated pricing data compiled by Bloomberg. Rival coins mostly steadied after a retreat overnight, as the industry braces for a contentious split in bitcoin offshoot bitcoin cash. After diving 17% yesterday, bitcoin cash gained 3.1% on Thursday.

“The $6 000 mark, which had been serving as a floor for a long time, gave way — this feels like a bit of a dangerous sign,” said Soichiro Tsutsumi, a trader with eWarrant Japan Securities KK in Tokyo. “Companies most impacted by the price move would be the ones with business models reliant on a client pool, on concern that the number of client accounts won’t expand.”

Bitcoin’s slump pushes prices into “deeply oversold” territory and suggests it may be due for a short-term rally, however longer-term technical indicators aren’t so favourable, according to Rob Sluymer with Fundstrat Global Advisors.

“This week’s breakdown produced significant technical damage,” Sluymer wrote in a note Wednesday. “That will likely take weeks, if not months, to repair to create a durable enough price ‘structure’ to support a multi-month rally.”

One stock bucking the trend was Ceres, which rose 8.2% after reporting nine-month earnings.

Two versions of bitcoin cash software will be competing to become the dominant chain on Thursday, and some miners could be switching from mining bitcoin to mining bitcoin cash to lend one or the other version support.

� L.P