Where Bitcoin Headed Next Depends On Stock Market? So Says Crypto Big Shot Barry Silbert

Digital Currency Group CEO Barry Silbert said Sunday on social media that the direction of the cryptocurrency market will be determined by the stock market in the near future.

What Happened: “Where the crypto market goes from here is completely dependent on the stock market over the next couple weeks,” Silbert tweeted.

On Sunday, major cryptocurrencies plummeted after Huobi, a major cryptocurrency exchange, said it had “scaled back or suspended some of its services and products in certain countries and has stopped its miner hosting services in mainland China."

Silbert termed the recent cryptocurrency meltdown “healthy.”

Lot of crypto traders just became long term investors. This is healthy

— Barry Silbert (@BarrySilbert) May 23, 2021

At press time, Bitcoin (BTC) traded 5.22% lower at $35,566 and Ethereum (ETH) was down 5.28% at $2,173.38 over a 24-hour period. BTC and ETH have fallen 20.35% and 36.03% over a seven-day trailing period.

Why It Matters: Digital Currency Group, whose subsidiary Grayscale is behind Grayscale Bitcoin Investment Trust GBTC and Grayscale Ethereum Trust ETHE, claims to be the world’s largest digital currency asset manager.

GBTC closed 8.93% lower at $30.10 on Friday in the regular session, while ETHE slipped 14.69% to $23.37. Over seven days, GBTC has fallen 15.21%, while ETHE has plummeted 28.70%.

See Also: Ethereum Co-Founder Vitalik Buterin Says Cryptocurrencies Are In A 'Bubble'

On Saturday, Tesla Inc TSLA CEO Elon Musk spoke out on the “battle” between fiat and cryptocurrencies and said he supported the latter.

Tesla’s announcement that it would no longer accept BTC for payment was a catalyst at the beginning of the cryptocurrency crash, which has been exacerbated by the developments in China.

Benzinga’s Take: Silbert could be hinting that stocks are the canary in the mine as far as risk appetite is concerned. Last week, Mott Capital Management’s Michael Kramer noted the “shifting” risk sentiment. He noted that the Russell 2000 index and Bitcoin have traded together since last year. Should the stock markets adopt a bearish sentiment, BTC and other cryptocurrencies may follow suit.