The cryptocurrency market is experiencing a significant downturn, with crypto-related stocks taking a substantial hit, particularly exchanges, following Robinhood's disappointing earnings report and escalating US-Iran tensions. Robinhood, a digital brokerage firm known for its crypto services, saw its stock plummet by nearly 14% after revealing a 47% decline in crypto-related revenue for the first quarter. This weakness has spread throughout the sector, with investors interpreting it as a sign of sluggish demand for crypto trading.
Major US crypto exchanges, including Coinbase and Bullish, have seen their stocks decline by 8%, while Gemini's stock dropped by 6%. Bitcoin mining companies, such as Riot Platforms and MARA, have also experienced a 6-7% decline in their stock prices.
Additionally, Strategy, the largest corporate owner of bitcoin, saw its stock fall by 4%. The decline in crypto stocks is more pronounced than the decline in crypto prices themselves, with bitcoin dipping below $76,000, down 0.5% over the past 24 hours.
The rejection of Iran's proposal by President Trump has added to the pressure, causing oil prices to surge by 6% and raising concerns about the potential disruption to energy supply chains in the Middle East. The US stock market is experiencing modest losses, with the Nasdaq down by 0.35%. The afternoon session is expected to bring more catalysts, including the results of the Federal Reserve meeting and the earnings reports of major tech firms, such as Alphabet, Amazon, Meta, and Microsoft, which will provide insight into their AI-related spending and the future direction of the AI trade and infrastructure buildout.