Bitcoin dropped to a 21-month low of $59,2175, dragging down major altcoins like Ethereum, XRP, and Dogecoin, as well as crypto-related stocks. Analysts link the sell-off to a broader risk-off move in semiconductor and AI stocks, coupled with expectations of tighter monetary policy from the Federal Reserve.
A risk-on rally that began in semiconductors and small caps has evolved into a full 'Animal Spirits' market, with bitcoin approaching $80,000 for the first time since February. Crypto-related stocks are seeing explosive options volume—Michael Saylor's Strategy is up 9% with call volume outpacing puts 5-to-1, while Coinbase saw a 5% bounce and a trader paid $120,000 for $230-strike calls expiring Friday. Tesla reports earnings tonight, down 10% year-to-date despite Nasdaq-100 making new highs, with options pricing in a 5.5% post-earnings swing.
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