The biggest rally in US stocks in months was not enough to ease the pain of holders of stocks linked to the cryptocurrency space, some of which are heading for their biggest weekly losses in years amid the FTX collapse.
Robinhood Markets Inc, MicroStrategy Inc and Galaxy Digital Holdings Ltd have each fallen at least 15% this week, with analysts at Piper Sandler calling FTX’s fall a “clear blow” to the cryptocurrency industry.
The jitters continued today as Sam Bankman-Fried’s FTX empire filed for bankruptcy. This came less than 48 hours after Binance withdrew from a bailout offer.
Robinhood is on track for its worst week since April as the bankruptcy of FTX removes any hope that the exchange could buy the trading platform, amid questions surrounding Bankman-Fried’s 7.6% stake in the company.
MicroStrategy, which has been buying Bitcoin en masse since 2020, is on track for its steepest decline in more than two decades, with the stock losing 37% of its value in the past five days.
Another stock in free fall is Silvergate Capital, which is also heading for a record weekly drop of 37%, while more than $5 billion has been wiped out of the value of a number of companies, data compiled by Bloomberg shows.
The poor performance for cryptocurrency-exposed stocks offered a stark contrast to the broader market, which is on track for its best week since June. The broader rally could only stem the losses for stocks like Coinbase Global and Hut 8 Mining
The cryptocurrency market has lost trillions of dollars in value this year, with Bitcoin having fallen as much as 75% from its highs of last year.
That, combined with a broader slide in equities, has wiped out 46% of the value of BlackRock’s iShares Blockchain and Tech ETF (IBLC) since its debut in April.
Previous Articles:
- Hodl Hodl and Trezor team up to promote bitcoin transaction privacy
- Coinbase, Kraken and BitPanda CEOs speak out on FTX crisis
- FTX chief’s fortune annihilated – One of the biggest disasters in crypto history
- Sam Bankman-Fried’s first words after the disaster
- FTX towards capital increase, discusses with Tron
