- The cryptocurrency rally is losing steam as digital assets and related stocks decline.
- Tokens and companies tied to the family of Donald Trump are suffering the largest drops.
- The Nasdaq appears to be tightening rules for digital-asset treasury companies.
The music has stopped. While traditional stocks and bonds surged on the promise of an imminent Federal Reserve rate cut, the high-flying world of cryptocurrency has largely refused to join the celebration.
A sharp wave of selling swept through the digital-asset space, with the most significant and painful losses hitting tokens and public companies that have direct ties to President Donald Trump’s family.
The sell-off was swift and severe. Shares of ALT5 Sigma Corp., a treasury company tied to the DeFi project World Liberty Financial connected to Trump, slid roughly 12% on Thursday and have now fallen more than 50% over the past week.
The project’s WLFI token was hit even harder, plunging about 25% and is down roughly 50% since its high-profile debut around Labor Day.
Even American Bitcoin Corp., the mining company involving Eric Trump that only recently began trading, was not spared—its shares dropped about 22%.
Nasdaq crackdown: a new sheriff in town
The targeted sell-off has been amplified by growing sentiment that the regulatory wind is shifting.
A new report from The Information on Thursday chilled the market by revealing that Nasdaq now requires some so-called digital-asset treasury (DAT) companies to obtain shareholder approval before issuing new stock to buy more tokens.
That move strikes directly at the business model that helped fuel the recent crypto boom.
Popularized by Michael Saylor of MicroStrategy, the strategy of issuing equity to finance massive token purchases without taking on debt was rapidly replicated by a wave of companies, including many struggling firms that turned to crypto as a survival strategy.
To date, 184 publicly traded companies have announced plans to raise more than $132 billion to buy various tokens, according to Architect Partners.
While Nasdaq’s decision is seen as a prudent step to protect shareholders, it risks choking off the very mechanism that helped propel the market higher.
“Full disclosure and the opportunity to have a say should be expected and required where they’re not provided. Yes, it will likely slow the pace of deals, but that may be a good thing,” said Eric Risley, founder of Architect Partners.
Market pares risk ahead of Powell pivot
The pain extends beyond Trump-related names.
The broader market has felt the chill, with treasury firms holding assets such as Ether and Solana also seeing their stocks fall, dragging down the prices of the underlying tokens.
Bitcoin, the market barometer, slipped about 2% to roughly $109,800, a sign that investors are actively trimming risk ahead of a key moment.
Recent U.S. labor-market data reinforced views of a cooling economy, setting the stage for the high-stakes Federal Reserve meeting later this month.
“From a macroeconomic perspective, people are dialing back risk a bit ahead of tomorrow’s employment data, which is an important datapoint before the Fed meeting later in the month,” said Shiliang Tang, managing partner at Monarq Asset Management.
The party, it seems, is over for now, and the market is bracing for the inevitable hangover.