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Is the latest cryptocurrency rally fading? Investors were right to ask that question on Thursday, as the recent pops seen in the prices of numerous coins and tokens appeared to fade into more modest gains. On top of that, the share prices of several crypto miner stocks had minus signs before their daily performances on the day.

This group of segment decliners included Riot Platforms (NASDAQ: RIOT) and peer Hut 8 Minings (NASDAQ: HUT), which both fell at marginal rates under 1%. A more meaningful decline was recorded by Cleanspark (NASDAQ: CLSK) — the value of that company saw a nearly 6% drop.

Rally exhaustion?

There wasn’t much news coming from any of those three companies. Hut 8 did announce that the Securities and Exchange Commission (SEC) declared the company’s registration statement effective. This document is part of the process under which the crypto miner will merge with privately held US Bitcoin Corp.

That deal, announced in the summer, is clearly an attempt at diversification away from the sharp mining focus of the current Hut 8. Perhaps that’s giving some investors pause to think; after all, if you have to diversify your business away from a core activity, maybe that activity doesn’t have as much potential as previously assumed.

Zooming out to the wider crypto world, the market might be readying to take a break from plowing money into an asset class that has ballooned in price lately. Many cryptos and related assets hit new yearly (or even longer-term) highs recently for price, most notably including the miner’s favorite, Bitcoin.

More than a few investors continue to hold their breath for the expected “any day now” approval of one or more Bitcoin spot exchange-traded funds. What’s exciting about such investments is that they would effectively allow people to benefit from cryptocurrency gains without actually holding cryptocurrencies.

It’ll be much easier to purchase an ETF holding a desired coin or token than doing so directly, as this involves the management of specialized software (specialized crypto wallets). It also demands at least some knowledge of the quirks and intricacies of crypto trading.

The interest rate question

Taking an even more top-down look at the landscape, there also haven’t been any earth-shaking developments in the domestic or global macroeconomy across the past day or so that would shake cryptocurrencies.

Opinions differ greatly about the chances the Federal Reserve will continue its recent habit of raising interest rates. This matters because, for the most part, higher rates put a damper on cryptocurrency sentiment. Cryptos are justifiably considered by many to be comparatively high-risk assets, and investors tend to gravitate to purportedly safer securities when rates defy gravity.

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Eric Volkman has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.

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