The cryptocurrency market is experiencing a significant downturn, with crypto-related stocks plummeting across the board, particularly affecting exchanges. This decline follows Robinhood's disappointing earnings report and escalating tensions between the US and Iran. Robinhood, a digital brokerage firm known for its crypto-friendly services, saw its stock price drop by nearly 14% after reporting a 47% decline in crypto-related revenue in the first quarter.
This weakness had a ripple effect on the sector, with investors interpreting it as a sign of sluggish crypto trading demand. As a result, US crypto exchange Coinbase and institutional-focused exchange Bullish, the parent company of CoinDesk, both experienced an 8% decline. Gemini, the embattled exchange business of billionaire investors Cameron and Tyler Winklevoss, fell 6%.
Bitcoin miners Riot Platforms and MARA also slid 6%-7%, while Strategy, the largest corporate bitcoin owner, was down 4%. The decline in crypto stocks was more pronounced than the decline in crypto prices themselves, with bitcoin edging below $76,000, down 0.5% over the past 24 hours. 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, added to the pressure. 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, due to concerns about the potential impact on energy supply chains in the Middle East. US stocks, meanwhile, are posting modest losses, with the Nasdaq down 0.35%.
The afternoon session is expected to bring more catalysts, starting with the Federal Reserve meeting results. Although no change in rates is anticipated, 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 their earnings, with traders eyeing their artificial intelligence-related spending as a gauge for the AI trade and infrastructure buildout.