The cryptocurrency market is experiencing a significant downturn, with major exchanges feeling the brunt of the impact, following Robinhood's disappointing earnings report and escalating US-Iran tensions. Robinhood, a digital brokerage firm with a strong presence in the crypto space, saw its stock plummet by nearly 14% after reporting a 47% decline in crypto-related revenue for the first quarter. This decline has sparked concerns among investors about the lack of demand for crypto trading, leading to a ripple effect across the sector. As a result, US-based crypto exchange Coinbase and institutional-focused exchange Bullish have both seen their stocks drop by 8%, while Gemini, the embattled exchange business of billionaire investors Cameron and Tyler Winklevoss, has fallen by 6%.
Bitcoin miners Riot Platforms and MARA have also experienced significant declines, with their stocks sliding by 6-7%. Meanwhile, Strategy, the largest corporate owner of bitcoin, has seen its stock drop by 4%. The decline in crypto stocks has been more pronounced than the decline in crypto prices themselves, with bitcoin edging below $76,000, down 0.5% over the past 24 hours.
The reported rejection by President Donald Trump of an Iranian proposal to end the naval blockade and open the Strait of Hormuz has added to the pressure on the market. The proposal, which involved reopening the strait while delaying nuclear negotiations, was rejected in favor of maintaining the naval blockade until a broader nuclear deal is reached.
This development has sent oil prices surging 6%, with the West Texas Intermediate topping $100 a barrel, amid concerns that energy supply chains in the Middle East could remain under pressure. In contrast, US stocks have posted only modest losses, with the Nasdaq down 0.35%. The afternoon session is expected to bring more catalysts, including the results of the Federal Reserve meeting, which is not expected to result in a change in rates.
Market participants will be looking to the accompanying policy statement and Powell's post-meeting press conference for clues about the future direction. Following the US market close, several major 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.