SpaceX, Hynix and Samsung crashes are pulling down tech and crypto

The expected stock market crash of (ironically) rocket company SpaceX was, of course, inevitable. After a climb of some 40% in the first few days following the IPO, investors who got in very early started taking their profits, and the stock dropped by about 16% in one swoop on Monday. There was not much improvement on Tuesday either, with crashes of more than 12% on the Kospi (Seoul) stock market for both Samsung Electronics and Sk Hynix.

Tech stocks are therefore tumbling downwards, and the crypto market is also joining the negative sentiment. Bitcoin dropped by about 4% on Tuesday and is trading at $62,600 at the time of writing.

Risk

US stock markets are reacting sensitively to rising interest rates there, which can be difficult for cash-guzzling companies like SpaceX, which is trading at more than one hundred times its annual revenue.

Chipmakers in both Europe and the United States also fell sharply.

Investors seem to be removing risky investments from their portfolios now that summer has officially begun. Tech stocks and Bitcoin are the biggest victims of this strategy.

Gold did not fare much better and hovered around the price of $4,100.

Musk

If there is one culprit for the major movements of the last few days, analysts are looking primarily at SpaceX stock, which is now trading close to its IPO price again.

Gossipers on the internet claim that Elon Musk’s friends, who were able to purchase the stock much cheaper before it was offered to the public, are now taking their profits.