Cryptos fall following megacap tech stock drop

Ether, the second-largest token, paced a drop in digital assets following a slump in equities that spread unease in global markets.

Ether slid about 6%, the most in three weeks, and was trading at $3,188 as of 6:45 a.m. Thursday in London. Market-leader Bitcoin was down approximately 3% to $64,260.

Tumbling megacap technology shares consigned the US stock market to its worst day since 2022 on Wednesday as feverish support for the artificial intelligence theme began to fray. The retreat has soured investors’ mood.

“It mainly seems that after a bad night for equities in the US, crypto like most asset classes is feeling a little bit of a flow-on effect in sentiment,” said Benjamin Celermajer, co-chief investment officer at Magnet Capital.

Eight new spot-Ether exchange-traded funds debuted in the US on Tuesday while the more than six-year-old Grayscale Ethereum Trust — the largest for Ether with assets of $8 billion — converted from a closed-end structure into an ETF. 

The Grayscale fund’s conversion smooths exits for the likes of arbitragers, and $811 million has left the product since the change, data compiled by Bloomberg show. That has spurred some caution even as the other Ether ETFs attract money.

There may have been some “sell-the-news” pressure on Ether after the ETF launches, which could “dry up soon” if market sentiment allows, wrote Noelle Acheson, author of the Crypto Is Macro Now newsletter.