The cryptocurrency market is experiencing a downturn, with crypto-related stocks declining sharply on Wednesday, particularly exchanges, following Robinhood's disappointing earnings and rising tensions between the US and Iran. Robinhood, a digital broker with a strong presence in the crypto space, saw its stock plummet nearly 14% after reporting a 47% decline in crypto-related revenue in the first quarter. This weakness had a ripple effect across the sector, with investors interpreting it as a sign of sluggish demand for crypto trading. US-based crypto exchange Coinbase and institutional-focused exchange Bullish both fell 8%, while Gemini, the exchange business of billionaire investors Cameron and Tyler Winklevoss, dropped 6%.
Bitcoin miners Riot Platforms and MARA also slid 6%-7%, and Strategy, the largest corporate bitcoin owner, was down 4%. The declines in crypto stocks were more pronounced than the decline in crypto prices themselves, with bitcoin edging below $76,000, down 0.5% over the past 24 hours. Adding to the pressure was President Donald Trump's reported rejection of an Iranian proposal to end the naval blockade and open the Strait of Hormuz, a critical global oil shipping route. The proposal involved reopening the strait while delaying nuclear negotiations, but Trump opted to maintain the naval blockade until a broader nuclear deal is reached.
This news sent oil prices surging 6%, with the West Texas Intermediate topping $100 a barrel on concerns that energy supply chains in the Middle East could remain under pressure. US stocks, meanwhile, are posting modest losses, with the Nasdaq down 0.35%. The afternoon session promises more catalysts, including the Federal Reserve meeting results, with no change in rates expected.
Market participants will be looking to the accompanying policy statement and Powell's post-meeting press conference for clues about the future direction. After the US market closes, several big tech firms, including Alphabet, Amazon, Meta, and Microsoft, will report earnings, with traders eyeing their artificial intelligence-related spending as a gauge for the AI trade and infrastructure buildout.