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As Bitcoin Prices Plunge, Overstock, Square Shareholders Also Hurt

why square stock down bitcoin prices plunge jack dorseywhy square stock down bitcoin prices plunge jack dorsey
Square stock, alongside Overstock and other blockchain firms fall Tuesday as Bitcoin's tumble ripples through the stock market.Bloomberg via Getty Images

As Bitcoin’s price plunged near $10,000 Tuesday on news of a strengthening cryptocurrency crackdown in Asia, companies that have tied their fortunes to cryptocurrency and blockchain are also taking a beating along with their investors.

Payments processor Square, which announced plans to allow for some Bitcoin buying and selling, lost 5%, or $90 million in market value on Tuesday. The company, led by Twitter CEO Jack Dorsey, ended regular trading valued at $15.1 billion.

Meanwhile, shares in Overstock, the e-commerce company that allows customers to pay in cryptocurrency, fell 11%. It ended the day with a $1.8 billion market capitalization, a loss of roughly $200 million.

The fall comes as South Korea—one of the biggest markets for Bitcoin and its close cousins—considers a cryptocurrency ban. China is also putting more teeth behind its regulations for online and app-based cryptocurrency services that are similar to exchanges, Bloomberg reported on Monday.

Square and Overstock weren’t the only companies to experience a fall out. In recent months, some smaller companies have announced plans to move into the blockchain space, and in same cases, rebrand themselves to include the word “blockchain” to gain some of the ample investor enthusiasm for anything even tangentially related to cyrptocurrencies.

In doing so, they’ve also tied themselves to the volatility in cryptocurrency prices. Shares of Riot Blockchain, once a biotech firm dubbed Bioptix, shed 17% Tuesday. And Chanticleer, a owner of some Hooters locations, shed 4%.

Eastman Kodak, perhaps better known for their cameras, fell 8%. The company has announced plans to offer a cryptocurrency known as KodakCoin at the end of the month, initially sending shares up 60% on the day of the announcement.

Shares of Long Blockchain, once Long Island Iced Tea, shed 2%. The one-time beverage maker announced plans Tuesday to merge with a U.K.-based firm, Stater Blockchain, “focused on developing and deploying globally scalable blockchain technology solutions in the financial markets.”