Bitcoin A very modest rebound from its steep overnight sell-off quickly fizzled out during US morning trading on Monday, as broader risk markets fell sharply.
Trading at $65,400 around midday on the East Coast, bitcoin is down 35% in the past 24 hours.
The action came as U.S. stocks fell. The S&P 500 and the tech-heavy Nasdaq 100 each fell more than 1%, led by renewed weakness in software stocks and private equity names.
The iShares Expanded Tech-Software ETF (IGV) sank another 5% to a new 52-week low and is now down nearly 35% since October amid concerns that generative AI tools could disrupt traditional software business models. Whether true or not, current market thinking is that cryptocurrencies are just software, and the price movements of bitcoin and IGV lately have been almost perfectly correlated.
Adding to that bearish theme are continued concerns that AI may be leading markets to the cusp of a major negative credit event similar to the global financial crisis of 2008. This is currently reflected in private equity stock prices. These companies have strong exposure to the aforementioned software sector. Blow Owl Capital (OWL), which sold assets last week in an attempt to appease liquidity-seeking investors, is down another 3.5% on Monday and 32% so far this year. BlackStone (BX), Ares Management (ARES), and Apollo Global Management (APO) added to their recent significant losses, falling between 6% and 8%.
Cryptocurrencies are often marketed as a high-beta indicator for technology and broader liquidity conditions, and Monday’s weakness reflected that dynamic. While BTC has so far held above the worst of its early February lows, it is still trading in a tight range between $60,000 and $70,000 as risk appetite remains fragile.
Adding to all this is uncertainty over global tariffs after the Supreme Court clamped down on President Trump’s earlier use of sweeping taxes, Joel Kruger, market strategist at LMAX Group, said in a note.
“This caused a classic risk-averse environment,” Kruger said. “Investors have pulled out of speculative assets like cryptocurrencies, and bitcoin is behaving more like a high-risk beta play than ‘digital gold.'”
