Shares of American Bitcoin Corp. (ABTC) experienced a dramatic sell-off, plummeting more than 50% in early trading. The sharp decline reflects a significant repricing within the cryptocurrency equity sector, coinciding with a broader downturn across digital asset markets. Mining companies and firms holding substantial Bitcoin treasuries were notably impacted, with ABTC leading the losses. Analysts attribute the severe drop to the unwinding of a popular proxy trade, where investors used equities as a leveraged bet on Bitcoin’s price performance. As Bitcoin’s price faced downward pressure, these correlated stocks amplified the market’s retreat. The event underscores the heightened volatility and intrinsic leverage embedded within crypto-linked public equities, which often trade at a premium to their underlying Bitcoin holdings. This repricing highlights the risks for investors seeking indirect exposure to cryptocurrency through traditional stock markets, especially during periods of market stress and declining digital asset valuations.
