Cryptocurrency stocks just can't catch a break.
Major Bitcoin investor Strategy summed up the sector's struggles on Monday, as its shares slid even as the broader market recovered from last week's artificial intelligence selloff.
Strategy stock dropped 3.6% ahead of the opening bell. It was down 15% for the year through Friday's close, tumbling due to an extended slump in digital assets.
The company reported on Monday that it had bought another 1,036 Bitcoin, taking its total holding to just over 850,000.
But the last few weeks haven't been kind to the world's largest cryptocurrency. Early Monday, it was down 1.5% over the past 24 hours as it extended a recent slump.
Bitcoin faces a tough outlook for three reasons. First, Wall Street is expecting that the Federal Reserve will carry on hiking interest rates to clamp down on inflation -- which tends to be bad news for risk assets.
Ongoing worries about a slowdown in AI spending could also hit the cryptocurrency, which tends to move in tandem with tech stocks. The Nasdaq Composite dropped 3.4% last week.
Lastly, investors will be keeping a close eye on an ongoing legal battle that could play an important role in Wall Street's tokenization push.
Last week, the Commodity Futures Trading Commission approved the trading of perpetual futures -- agreements that allow investors to bet on if the price of an asset will go up or down, without owning said asset.
But trade group the Capital Markets Alliance quickly sued the regulator to halt the approval.
The approval matters because it could be "another meaningful step toward bringing products historically concentrated on offshore crypto venues into regulated U.S. markets," Cantor analyst Gareth Gacetta said.
Other crypto stocks were also struggling on Monday.
Coinbase fell 2.1%, even after the digital-asset exchange said the Office of the Comptroller of the Currency had approved its application to charter a national trust bank.
Online trading platform Robinhood declined 1%.
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