Bitcoin, Ethereum Retreat. Why Crypto Is Trading Like Stocks, Not Gold.

Bitcoin was boosted last week by the cease-fire between Israel and Iran, which increased risk appetite. (Dreamstime)

The price of Bitcoin and other cryptocurrencies was falling as traders’ appetite for risky assets slipped at the start of the third quarter.

Cryptos often trade in line with technology stocks, and that relationship was holding early Tuesday. Bitcoin, the oldest and largest digital coin, slipped 0.7% over the past 24 hours to $106,745, according to CoinDesk prices. It’s still not too far off the record $111,000. Futures for the tech-heavy Nasdaq were down 0.2%.

The retreat may be driven in part by traders selling up to lock in profits from the end of the second quarter. Digital assets were boosted last week by the cease-fire between Israel and Iran, which increased risk appetite. Tuesday’s pullback may come down to natural fluctuations in markets—the S&P 500 and Nasdaq finished the quarter yesterday at record highs.

While Bitcoin usually trades like stocks, it sometimes benefits from its claims of being a haven asset like gold because its supply is strictly controlled. That wasn’t the case today, as gold futures were climbing 1.5%.

The bigger picture is that there’s still a lot of optimism about crypto. On Monday, the Robinhood Markets platform unveiled several new crypto-focused products, including perpetual futures and exchange-traded funds for Europe. Its shares rose sharply, suggesting an underlying investor optimism about the future of digital assets. Robinhood shares may also be added to the S&P 500 index.

Other companies are focusing on buying and selling cryptos as the core of their business. MicroStrategy, the largest corporate holder of Bitcoin, could shortly cross the threshold of owning more than 600,000 tokens. Its shares rose Monday, but were slipping in premarket trading.

The prices of smaller cryptos were also lower Tuesday. Ethereum, the second-biggest token, fell 0.4%. Solana declined 0.8% and Dogecoin was down 2.5%. XRP, the token used on the Ripple platform, rose 1.1%

Write to Brian Swint at brian.swint@barrons.com