The second trading day of the week was hardly a good one for stocks either fully or mostly dependent on the performance of the world's leading cryptocurrency. As a group, these titles fell dramatically in price.

Cleanspark (CLSK -6.43%) lost 9% of its value by market close, while its peer, Bit Digital (BTBT -8.44%), fell by almost 11%. Microstrategy (MSTR -4.66%), which is effectively an all-in investor in Bitcoin (BTC 0.39%), fared relatively well by closing "only" 3.5% lower.

Bitcoin sings the blues

One of the few positive aspects of such group falls is that it isn't hard to identify the culprit. The bad guy is, of course, Bitcoin, which got socked by investors Monday night. That rout continued well into the following day. As of late afternoon trading, the coin's price was well off its recent peak of more than $70,000, at slightly over $65,000.

Several factors are driving Bitcoin lower. One of the more influential ones is the appreciation of the U.S. dollar, the currency in which the major cryptos are priced. This rise was due in no small part to a crucial manufacturing index, which unexpectedly rose in March.

Specifically, I'm referring to the Institute for Supply Management's (ISM) factory index. It rose by 2.5 percentage points to 50.3 in that month. Not only did this top the estimates of many economists, but it also was the first increase since September 2022.

Such surprises tend to attract the attention of investors, particularly those based overseas. It makes the dollar more appealing -- hence, the bump in the greenback's value.

The downside of this is that it can spook some of those folks away from dollar-denominated assets. And it also makes industrial companies more attractive, another factor drawing funds away from more adventurous investments like crypto.

Meanwhile, the splashy January debut of spot Bitcoin exchange-traded funds (ETFs) is a top factor in the rise of Bitcoin and associated investments. On Monday, however, the clutch of spot Bitcoin ETFs saw net outflows for the first time in over a week. Citing data from BitMEX, Fortune magazine reported that such outflows totaled nearly $86 million that day.

Hello volatility

It's too early to tell whether this slide is a short-term correction to a hot rally or a longer-duration slide. My instinct is that it's more the former, as those ETFs remain popular despite the recent exodus, and sentiment on cryptocurrency still feels positive. Still, anything crypto-related is volatile, so investors should be prepared for a possible bumpy ride ahead.