By Bitcoinist - 6 months ago - Reading Time: 3 minutes
Crypto Resurgence Triggers $200 Billion Loss In ‘Magnificent Seven’ Tech Shares
The crypto market is currently experiencing a significant upswing, with cryptocurrencies collectively gaining $1.3 trillion in market capitalization over the past week. This surge in enthusiasm for digital assets coincides with the imminent approval of a spot Bitcoin Exchange-Traded Fund (ETF) in the United States, providing a major boost to the entire crypto ecosystem.
As a striking counterpoint, the tech stock market has been grappling with a substantial decline. Nearly $200 billion was wiped from the market capitalization of the so-called “magnificent seven” tech stocks, a group that includes heavyweights such as Meta, Apple, and Alphabet. These tech giants collectively contribute a quarter of the value of the S&P 500 index.
BREAKING: Google stock, $GOOGL, is now down by 10% posting its worst day since March 2020.
Nearly $200 billion in market cap has been erased today alone.
The 7 largest tech stocks in the S&P 500 have lost more than a combined $500 billion today.
This is the most widespread… pic.twitter.com/1NcZx3b7eM
— The Kobeissi Letter (@KobeissiLetter) October 25, 2023
Meta witnessed a 4.2% drop, Apple a 1.9% decline, and Google’s parent company, Alphabet, endured a substantial 9% plunge, erasing a staggering $180 billion from its market capitalization. This marked Google’s worst-performing day since the onset of the COVID-19 pandemic in March 2020. However, Microsoft stood out as the exception among the seven, with its stock price surging by 3.1% after reporting robust growth in its Azure business.
Tech Sell-Off Sends Shockwaves Through The Market
The widespread selloff in the tech sector has sent shockwaves throughout the market, resulting in the S&P 500 index hitting a five-month low, according to The Kobeissi Letter. The simultaneous decline of the “magnificent seven” has raised concerns about the resilience of the tech industry, which has been a stalwart of the financial landscape in recent years.
Even as Microsoft, $MSFT, crushed earnings, the stock is now only up 3%.
It seems like buyers are becoming more hesitant as headwinds accumulate.
We continue to expect more volatility over the next few months.
Follow us @KobeissiLetter for real time analysis as this develops.
— The Kobeissi Letter (@KobeissiLetter) October 25, 2023
In stark contrast to the tech sell-off, the crypto market has been on a relentless upward trajectory, buoyed by optimism surrounding the potential approval of a spot Bitcoin ETF. This recent surge has seen the crypto market’s capitalization grow by an impressive 16.3%. Nevertheless, the crypto market is not impervious to adverse macroeconomic conditions, as evidenced by its sharp downturn earlier in the year.
Crypto Market’s Resilience In A Volatile Landscape
When the United States witnessed a decline in its real gross domestic product during the first two quarters of 2022, the cryptocurrency market capitalization plummeted by a staggering 61.7%, falling from $2.37 trillion to $907 billion, according to CoinGecko. This demonstrates that, while cryptocurrencies have shown remarkable resilience, they are not immune to broader economic forces.
The recent sell-off in stocks was exacerbated by a spike in bond yields, as the 10-year US Treasury yield surged by approximately 12 basis points to reach 4.95%. This increase followed a disappointing auction for five-year Treasury notes, revealing weak demand from potential buyers.
The Treasury department’s plan to announce auction size increases next week has further fueled investor anxiety, raising concerns about a potential oversupply of Treasury issuances and its impact on the broader financial markets.
Featured image from ActiveRain
Original source: Bitcoinist