The cryptocurrency market is experiencing a significant downturn, with major exchanges being hit the hardest, following Robinhood's disappointing earnings report and escalating US-Iran tensions. Robinhood, a popular digital brokerage firm, saw its stock plummet by nearly 14% after reporting a 47% decline in cryptocurrency-related revenue in the first quarter. This decline had a ripple effect on the entire sector, with investors interpreting it as a sign of weak demand for cryptocurrency trading. As a result, US-based cryptocurrency exchange Coinbase and institutional-focused exchange Bullish both saw their stocks drop by 8%.
Gemini, the embattled exchange business owned by billionaire investors Cameron and Tyler Winklevoss, experienced a 6% decline. Bitcoin miners Riot Platforms and MARA also saw their stocks slide by 6-7%, while Strategy, the largest corporate owner of bitcoin, was down 4%. The decline in cryptocurrency stocks was more pronounced than the decline in cryptocurrency prices themselves, with bitcoin edging below $76,000, down 0.5% over the past 24 hours.
The pressure was further exacerbated by 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. The 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 news 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.
US stocks, meanwhile, 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. After the US market closes, 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.