Bitcoin bucks stock market rally as U.S. regulators hone in on crypto

Bitcoin (BTC-USD) and other major cryptocurrencies are extending last week’s losses Monday as U.S. regulators intensify their scrutiny of the industry. The risk-off day also comes on the eve of the highly-anticipated CPI report for January.

Looking at intraday price action, bitcoin (BTC-USD) slid 1.6% to $21.62K as of 3:22 p.m. ET, and ethereum (ETH-USD) gapped down 3.1% to $1.48K, both bucking the stock market rally. The tokens were in the red so far in February following January’s notable jump.

Binance coin (BNB-USD), the native token of crypto exchange Binance, dropped nearly 10% at the time of writing after New York’s financial watchdog ordered Paxos Trust Company to stop minting new dollar-pegged BUSD (BUSD-USD) tokens, citing the stablecoin issuer’s failure to safely administer the token.

The U.S. Securities and Exchange Commission was said to have also been looking to sue Paxos on the basis that BUSD is an unregistered security. On a similar note, the SEC last week charged crypto exchange Kraken for not registering its staking platform.

The slump in token prices had more influence of crypto-related stocks than the broader stock market, as the majority of crypto-related stocks were changing hands in negative terrain. Greenidge Generation (GREE) -5.3%, Silvergate Capital (SI) -2.5%, Core Scientific (OTCPK:CORZQ) -4.6% and Coinbase Global (COIN) -2.7% were among some of the biggest intraday losers.

It’s worth noting that Grayscale Bitcoin Trust (OTC:GBTC), the largest publicly-traded bitcoin (BTC-USD) fund, has seen its discount to net asset value swell to 46.6%, almost the widest discount on record, according to TraderBlock data. That comes roughly one week after crypto conglomerate Digital Currency Group had reportedly started selling shares in a number of trusts operated by its subsidiary Grayscale Investments at a deep discount.

See why Seeking Alpha contributor Kevin George thinks bitcoin is a Sell.