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 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 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 fallen by 8%, while Gemini has dropped 6%. Bitcoin miners Riot Platforms and MARA have also declined by 6-7%, and Strategy, the largest corporate owner of bitcoin, has seen a 4% decrease. 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. Adding to the pressure is the news that President Donald Trump has reportedly rejected an Iranian proposal to end the naval blockade and open the Strait of Hormuz, a critical global oil shipping route.
The proposal involved reopening the strait while delaying nuclear negotiations, but Trump has opted to maintain the naval blockade until a broader nuclear deal is reached. This development has led to a 6% surge in oil prices, with the West Texas Intermediate exceeding $100 a barrel due to concerns about the potential disruption to energy supply chains in the Middle East. Meanwhile, US stocks are experiencing 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. After the US market closes, several major tech firms, including Alphabet, Amazon, Meta, and Microsoft, will report their earnings, with traders focusing on their artificial intelligence-related spending as a gauge for the AI trade and infrastructure buildout.