What happened
Hut 8 Mining (HUT +0.00%) and Marathon Digital Holdings (MARA +1.89%) are each down 10% today as of 12 p.m. EST. The crypto mining firms were tumbling in sympathy with cryptocurrency volatility. In particular, Bitcoin (BTC +0.85%) was down more than 4% and had dipped below the $50,000 level again, an arbitrary value against the U.S. dollar that has served as a type of psychological anchor for crypto traders and investors of late.
Image source: Getty Images.
So what
There was no specific news to cause shares of Hut 8 or Marathon to tumble other than the widespread sell-off in the crypto universe. But since both firms are top holders of Bitcoin and preoccupy themselves with mining the original digital currency, they act as a type of stock-based play on the crypto.
Other companies closely tied to Bitcoin's value were also down today, but not as much as Hut 8 and Marathon. Bank and institutional crypto trading platform provider Silvergate Capital (SI 12.63%) fell 5%. Though the company's prospects are now tied to the fate of the digital currency world, the bank has other interests that kept it propped up compared to crypto mining stocks. Same goes for Coinbase Global (COIN +4.25%), which fell nearly 7% in morning market trade.
Now what
It's important to remember it's still early days for the cryptocurrency industry and all the hot tech movements closely linked to it, like web3, the metaverse, and NFTs. Severe daily swings in crypto and crypto stock prices -- both up and down -- are completely normal and likely will be for some time.
That doesn't change the prospects for these firms that are all in on the advancement of crypto. But given the wild ups and downs, remember to stay diversified and consider taking a basket approach by investing in a group of stocks and cryptos with big aspirations in the digital economy.
