- The crypto rally falters as digital assets and related stocks fall.
- Tokens and companies tied to Donald Trump’s family suffer the steepest declines.
- Nasdaq is reportedly tightening rules for digital-asset treasury firms.
The music has stopped. While traditional stocks and bonds climb on expectations of an imminent Fed rate cut, the high-flying world of cryptocurrencies is noticeably refusing to join the party.
A brutal selloff has swept through digital assets, and the sharpest, most painful losses have hit tokens and firms with direct ties to President Donald Trump’s family.
The rout has been swift and severe. Shares of ALT5 Sigma Corp., the treasury company behind the Trump-linked DeFi project World Liberty Financial, plunged about 12 percent on Thursday and have fallen more than 50 percent over the past week.
The project’s WLFI token has fared even worse, tumbling roughly 25 percent on the day and about 50 percent since its heavily promoted Labor Day debut.
Even American Bitcoin Corp., Eric Trump’s newly listed mining company, has not been spared; its stock has dropped as much as 22 percent.
Nasdaq crackdown: a new sheriff in town
This targeted selling is being amplified by growing concern that regulation is about to tighten.
A report published Thursday by The Information sent chills through markets, revealing that Nasdaq now requires some so-called digital asset treasury (DAT) companies to obtain shareholder approval before issuing new shares to buy tokens.
That is a direct hit to the business model that has fueled the recent crypto boom.
MicroStrategy pioneer Michael Saylor’s approach—issuing stock to finance massive coin purchases without taking on debt—has been adopted by a number of firms, many of them struggling businesses that turned to crypto to try to save themselves.
So far, a staggering 184 publicly traded companies have announced plans to raise more than $132 billion to buy various coins, according to Architect Partners.
While Nasdaq’s move is viewed as a cautious step to protect shareholders, it threatens to choke off the very mechanism that lifted markets.
“Full disclosure and the opportunity to voice an opinion should be expected and required if it is not already regulated. Yes, it will likely slow down the pace of transactions, but that may be a good thing,” said Eric Risley, founder of Architect Partners.
Markets cut risk ahead of a possible Powell pivot
The pain is not limited to Trump-linked ventures.
Broader markets are also feeling the chill: shares of treasury companies holding assets such as Ether and Solana are falling, pulling down the prices of the underlying coins.
Bitcoin, the market bellwether, slipped about 2 percent to roughly $109,800, signaling traders are actively reducing risk as a key moment approaches.
Recent U.S. labor market data have reinforced expectations of a cooling economy and set the stage for the Federal Reserve’s consequential policy meeting later this month.
“From a macro perspective, people are de-risking a bit ahead of tomorrow’s payrolls, which is a major economic data point before the Fed meeting later this month,” said Shiliang Tang, CEO of Monarq Asset Management.
The party appears to be over, and markets are now bracing for the inevitable hangover.