Key Highlights

● Strategy, Circle and Coinbase were among the decliners after Wednesday's gains.

● Bitcoin traded around $81,200 to $81,300, down roughly $3,100 to $3,400.

● About $400 million in crypto positions were liquidated on Thursday.

● TRON Inc. rose against the weak crypto tape.

Crypto-linked stocks reversed course on Thursday, October 22, retreating after gains on Wednesday. Strategy (NASDAQ:MSTR), Circle and Coinbase (NASDAQ:COIN) were among the decliners as bitcoin slid toward $81,000.

The pullback was driven by a sharp fall in crypto prices and a broader selloff in technology shares.

Bitcoin's slide

Bitcoin fell in its biggest drop since June. It traded around $81,200 to $81,300 late in the day, down roughly $3,100 to $3,400, and briefly slipped below $81,000. Ether dropped to about $2,381.

The crypto weakness was attributed to oil above $111 a barrel and fading risk appetite. Brent crude rose to $113.17, its highest since May 4, after Houthi attacks in Saudi Arabia.

Leverage made the move worse. About $400 million in crypto positions were liquidated, according to liquidation-tracking data.

Why these stocks move with bitcoin

Crypto stocks are closely tied to the price of digital assets. Strategy holds a large bitcoin treasury, so its shares tend to rise and fall with the cryptocurrency, often by more. Coinbase earns much of its revenue from trading fees, which can depend on crypto prices and activity. Circle issues the USDC stablecoin, and its shares have traded as a broader bet on the crypto economy.

The pressure showed up early. Before the opening bell, Strategy, Circle and Coinbase all traded lower, along with crypto-treasury companies BitMine Immersion and SharpLink.

Crypto funds also fell. BlackRock (NYSE:BLK)'s iShares Bitcoin Trust and its iShares Ethereum Trust both declined.

There was one notable exception. TRON Inc. (NASDAQ:TRON), which holds a treasury of the TRX token, rose against the weak crypto tape; no company-specific announcement was reported. Smaller stocks can be highly volatile on thin news.

A day of tech selling

Crypto stocks were caught in a larger retreat from high-growth names. The Nasdaq Composite fell 694 points to 26,008.86, its steepest drop since June 5, as Meta Platforms (NASDAQ:META) laid out heavy artificial-intelligence spending plans and Lam Research (NASDAQ:LRCX) cited supply constraints. The S&P 500 dropped 93.74 points to 7,663.43, its worst day since July.

"People are running away from tech," one fund strategist said. "Investors are starting to realize that there are some holes in the AI story," another market commentator added. The Philadelphia Semiconductor Index had its biggest one-day drop since June 23.

Coinbase also faced a regulatory item: its Irish unit was fined $3.6 million by the Central Bank of Ireland.

Under the surface, the broader market held up. About two of every three S&P 500 stocks rose, according to market data, as money moved into consumer staples, health care, utilities and homebuilders. Treasuries rallied, and the 10-year yield closed back below a closely watched threshold for the first time since September 22.

Bitcoin's Hold Near 81,000 Is the First Test

Crypto stocks will likely keep tracking bitcoin, so whether the cryptocurrency holds near $81,000 is the first test. The Federal Reserve, led by Chair Kevin Warsh, announces its decision on October 28, and September PCE inflation arrives on October 29. Big tech results from Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) on October 28 and Amazon (NASDAQ:AMZN) on October 29 could shape risk appetite. Oil and Middle East developments remain a wildcard for speculative assets.