The cryptocurrency market is experiencing a downturn, with crypto-related stocks declining significantly on Wednesday. This decline comes after Robinhood's disappointing earnings report and escalating tensions between the US and Iran.
Robinhood, a digital brokerage firm known for its crypto services, saw its stock plummet by nearly 14% after reporting a 47% decline in crypto-related revenue in the first quarter. This weakness has spread throughout 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 have both fallen by 8%, while Gemini has dropped by 6%. Bitcoin miners Riot Platforms and MARA have also slid by 6%-7%, and Strategy, the largest corporate bitcoin owner, has declined by 4%. The decline in crypto stocks is 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 is 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. This proposal involved reopening the strait while delaying nuclear negotiations, but Trump opted to maintain the naval blockade until a broader nuclear deal is reached.
The news has sent oil prices surging by 6%, with the West Texas Intermediate topping $100 a barrel due to concerns about energy supply chains in the Middle East. US stocks are posting modest losses, with the Nasdaq down by 0.35%. The afternoon session is expected to bring more catalysts, including the Federal Reserve meeting results and the earnings reports of big tech firms such as Alphabet, Amazon, Meta, and Microsoft.
Traders will be eyeing these firms' artificial intelligence-related spending as a gauge for the AI trade and infrastructure buildout.