Cryptocurrency-related stocks are falling across the board on Wednesday, with stocks taking the brunt after Robinhood’s earnings miss and rising tensions between Iran and the US.
Robinhood (HOOD), a cryptocurrency-friendly digital broker, plunged nearly 14% after it reported a nearly 47% decline in cryptocurrency-related revenue in the first quarter late Tuesday.
The weakness spread across the sector as investors took it as a sign of lackluster demand for cryptocurrency trading. American cryptocurrency exchange Coinbase (COIN) and institutional exchange Bullish (BLSH), the parent company of CoinDesk, fell 8%. Gemini (GEMI), the beleaguered foreign exchange business of billionaire investors Cameron and Tyler Winklevoss, fell 6%.
Bitcoin miners Riot Platforms (RIOT) and MARA (MARA) also fell between 6% and 7%. Strategy (MSTR), the largest corporate owner of bitcoin, was down 4%.
The declines were steeper than those in the cryptocurrency prices themselves, as bitcoin fell below $76,000, down 0.5% in the last 24 hours.
Adding to the pressure was the fact that President Donald Trump reportedly rejected an Iranian proposal to end the naval blockade and open the Strait of Hormuz, a critical route for global oil shipping.
The Iranian regime’s proposal involved reopening the strait and delaying nuclear negotiations, but Trump opted to maintain his naval blockade until a broader nuclear deal is reached, Axios reported.
The news sent oil prices up 6%, with West Texas Intermediate breaking above $100 a barrel on concerns that energy supply chains in the Middle East could remain under pressure.
Meanwhile, US stocks are posting modest losses, with the Nasdaq down 0.35%.
The afternoon session promises more catalysts, the first being the results of the Federal Reserve meeting. Without changes in rates it will be Jerome Powell’s last meeting as president. However, market participants will look for clues about future direction in Powell’s accompanying policy statement and post-meeting press conference.
After the US market closes, a number of big tech companies, including Alphabet (GOOG), Amazon (AMZN), Meta (META) and Microsoft (MSFT), will report earnings. Traders will view enterprise spending related to artificial intelligence as an indicator of the development of AI commerce and infrastructure.
