TLDR
- Bitcoin mining stocks rebounded sharply on Monday with Bitfarms and Cipher Mining gaining 26% and 20% respectively after Friday’s market crash
- President Trump walked back his 100% tariff threat against China after misunderstanding new Chinese export controls on rare earth minerals
- Friday’s crypto flash crash caused $19 billion in liquidations, the largest in crypto history, surpassing the FTX collapse
- OpenAI’s partnership with Broadcom for custom AI chips and Bloom Energy’s $5 billion data center deal boosted mining stock sentiment
- Treasury Secretary Scott Bessent confirmed the proposed 100% tariffs on China “don’t have to happen”
Bitcoin mining stocks posted strong gains on Monday as investors recovered from Friday’s market panic. The rally came after confusion over Chinese export rules was clarified.
Bitfarms led the recovery with a 26% jump. Cipher Mining followed with a 20% gain. Bitdeer, IREN and MARA Holdings each advanced around 10%.
The rebound reversed Friday’s steep sell-off. That crash happened after President Trump announced plans for 100% tariffs on Chinese imports. Markets feared an escalating trade war between the US and China.
Trump’s comments were based on a misunderstanding of China’s new export measures. China had expanded export restrictions on rare earth minerals for defense and semiconductor industries. Trump appeared to interpret these controls as a hostile action against the US.
Over the weekend, Trump walked back his remarks. He posted on Truth Social saying “Don’t worry about China, it will all be fine.” He added that President Xi “just had a bad moment.”
US Treasury Secretary Scott Bessent provided further clarity. He stated the proposed 100% tariffs “don’t have to happen.” This helped calm investor concerns about trade tensions.
AI Sector Boosts Mining Stocks
Monday’s gains were also driven by positive AI sector news. OpenAI announced a deal with chipmaker Broadcom to build custom chips for AI and machine learning. This partnership signals growing demand for computing infrastructure.
Bloom Energy revealed a $5 billion agreement with Brookfield Asset Management. The deal will deploy fuel cells in data centers to meet AI’s energy demands. Mining companies have been positioning themselves to benefit from AI’s need for computing power.
Other crypto-related stocks saw modest gains. Strategy, the largest Bitcoin treasury firm, climbed 2.8%. Coinbase traded roughly flat while Robinhood gained 1%.
Historic Crypto Liquidation Event
Friday’s market turmoil hit digital assets harder than stocks. The flash crash caused $19 billion in leveraged positions to be liquidated. This surpassed the FTX collapse as the largest liquidation event in crypto history.
Bitcoin proved more resilient than altcoins during the crash. Altcoins experienced steeper losses from peak to trough. The sell-off was intense enough to prompt regulatory concerns.
Crypto.com CEO Kris Marszalek called for regulators to investigate exchanges’ handling of the event. He questioned whether some platforms slowed down or mispriced assets during the crash. He also raised concerns about compliance controls.
Roughly half of all liquidations occurred on Hyperliquid. This decentralized perpetual futures exchange saw about $10.3 billion in positions erased. Bybit and Binance also reported large liquidations.
Binance faced scrutiny after reports that several token prices briefly fell to zero. The exchange explained this was caused by a user interface display bug. The bug affected certain trading pairs but did not impact actual trading.
Binance was also linked to an exploit affecting Ethena’s synthetic dollar, USDe. The stablecoin lost its dollar peg during the market chaos. Guy Young, founder of Ethena Labs, clarified the depeg was isolated to Binance.
Young explained the issue was not related to USDe’s minting or redemption process. The price discrepancy occurred because Binance referenced its own orderbook. Deposit and withdrawal issues during the event prevented market makers from arbitraging the price difference.
The Nasdaq and S&P 500 indexes recovered on Monday, up 2.1% and 1.4% respectively.
