The cryptocurrency market is experiencing a significant downturn, with major exchanges feeling the impact of Robinhood's disappointing earnings 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 had a ripple effect throughout the sector, with investors interpreting it as a sign of sluggish crypto trading demand.
As a result, US-based crypto exchange Coinbase and institutional-focused exchange Bullish both experienced an 8% drop, while Gemini, the exchange business of billionaire investors Cameron and Tyler Winklevoss, fell by 6%. Bitcoin miners Riot Platforms and MARA also saw their stocks slide by 6-7%, while Strategy, the largest corporate bitcoin owner, dipped by 4%. The decline in crypto-related stocks was more pronounced than the decrease in crypto prices themselves, with bitcoin hovering just 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, a critical global oil shipping route, added to the pressure. The Iranian regime's 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 development led to a 6% surge in oil prices, with the West Texas Intermediate exceeding $100 a barrel, amid concerns that energy supply chains in the Middle East could remain under pressure. Meanwhile, US stocks posted modest losses, with the Nasdaq down 0.35%. The afternoon session is expected to bring more catalysts, starting with the Federal Reserve meeting results, where 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. Following the US market close, 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.