- The crypto rally is fading as digital assets and related stocks decline.
- Tokens and companies linked to Donald Trump’s family suffered the steepest drops.
- Nasdaq is reportedly tightening rules for treasury-style companies that hold digital assets.
The music has stopped. While traditional stocks and bonds climb on hopes of an imminent Federal Reserve rate cut, the crypto world is clearly refusing to join the party.
A brutal wave of selling swept through the digital-asset space, and the sharpest, most painful losses hit tokens and companies with direct ties to President Donald Trump’s family.
The sell-off was swift and severe. Shares of ALT5 Sigma Corp., the treasury company tied to the Trump-linked DeFi project World Liberty Financial, plunged roughly 12 percent on Thursday and are down more than 50 percent over the past week.
The project’s WLFI token was hit even harder, falling about 25 percent on the day and roughly 50 percent since its high-profile Labor Day debut.
Even American Bitcoin Corp. — the mining company involving Eric Trump that only recently began trading — was not spared, with its stock tumbling as much as 22 percent.
Crackdown on Nasdaq: a new sheriff in town
This targeted selling has been amplified by a growing sense that the regulatory tide is turning.
A new report by The Information on Thursday sent a chill through the market, revealing that Nasdaq now requires some so-called digital-asset-treasury (DAT) companies to obtain shareholder approval before issuing new shares to buy more tokens.
That requirement strikes directly at the business model that powered the recent crypto boom.
Popularized by Michael Saylor of MicroStrategy, the strategy of issuing equity to fund large-scale coin purchases without taking on debt has been adopted by many companies — including a number of distressed businesses that pivoted to crypto in a bid to revive their fortunes.
According to Architect Partners, an astonishing 184 publicly traded companies have announced plans to raise more than $132 billion to buy various coins.
While Nasdaq’s move is seen as a cautious step to protect shareholders, it risks choking off a mechanism that has been fueling market rallies.
“Full disclosure and the ability to opt in should be expected and demanded if they are not already provided. Yes, it will probably slow the pace of transactions, but maybe that’s a good thing,” said Eric Risley, founder of Architect Partners.
Market pares risk ahead of Powell’s turn
The pain isn’t limited to Trump-linked ventures.
The broader market is feeling the chill as treasury-style firms holding assets like Ether and Solana also see their stocks fall, dragging down the prices of the underlying coins.
Bitcoin, the market leader, slipped about 2 percent to roughly $109,800 — a sign of a market actively reducing risk ahead of a key moment.
Recent U.S. labor-market data reinforced a cooling economic narrative, setting the stage for the Federal Reserve’s meeting later this month.
“From a macro perspective, people are dialing back risk slightly ahead of tomorrow’s employment data, which is an important economic datapoint before the Fed meeting at the end of the month,” said Shiliang Tang, managing partner at Monarq Asset Management.
It appears the party is winding down, and the market is bracing for an inevitable hangover.