Market Selloff Hits Major Crypto-Related Companies
Crypto stocks experienced significant declines today, with notable drops from Circle, Robinhood, Coinbase, and Strategy. Circle saw a decrease of 9.67%, Robinhood fell by 7.78%, Coinbase sank 6.49%, and Strategy lost 4.68%.
The market downturn appears to be linked to a sudden development in Washington concerning a major crypto bill slated for a Senate vote. The bill, which was anticipated to have a substantial impact on the entire market, was scheduled for a vote on Thursday. However, late Wednesday night, Coinbase CEO Brian Armstrong expressed strong reservations:
“Coinbase unfortunately can’t support the bill as written. This version would be materially worse than the current status quo. We’d rather have no bill than a bad bill.”
Following this statement, the Senate Banking Committee withdrew the legislation, leading to the immediate market reaction.
Legislative Delay Triggers Stock Declines
Circle, which had previously shown strong performance on Wall Street, dropped to $76.60 with $1.2 billion in traded volume. Coinbase fell to $239.26 on $83.4 million in volume. Robinhood crashed to $110.36, and Strategy dropped to $170.93. Collectively, these companies experienced a loss of over $20 billion in market value.
The broader crypto sector also experienced a downturn. Exodus recorded the largest drop at 11.09%. Bitmine lost 5.48%, CleanSpark was down 4.42%, and Riot Platforms fell 4.33%. MARA, Bitfarms, Bullish, and Canaan all saw declines ranging between 3% and 6%. Other companies, including PayPal, Block, SharpLink, Metaplanet, Hut 8, Neptune, and GREE, also experienced losses, indicating a widespread negative sentiment across the sector.
Even companies with lower trading volumes, such as Exodus, with only $44K in daily trades, were affected by the selloff. Meliuz dropped 6.03%, and American Bitcoin Corp fell 4.26%. Gemini, Bit Digital, and Semler Scientific also turned negative. CIFR, PRE, BOYAF, MARA, and MTPLF were among the other stocks that experienced declines.
Shifting Market Dynamics Impact Bitcoin and ETFs
Earlier in the week, Bitcoin saw a significant rally, jumping from $90,000 to a two-month high, partly influenced by rumors of U.S. involvement in Iran. Bitcoin ETFs experienced substantial inflows, with over $1.7 billion invested in just three days, marking the longest streak of inflows in months.
However, this positive trend reversed as reports emerged indicating that the U.S. would not be directly involved in Iran. This development dampened the rally, prompting traders to withdraw funds and leading to a stock market decline. The absence of significant buyer interest suggests that investors who entered the market earlier in the week are now exiting.
Exceptions in the Downturn and Broader Market Context
Despite the overall market slump, a few stocks managed to hold their ground or even rise. Galaxy Digital popped 13.46%, with over $849 million in trades. Bitdeer rose 3.39%, and Nexon and Net Holding also saw positive gains. These companies represent exceptions to the prevailing trend, as most crypto-related names experienced significant losses today.
In contrast to the crypto market, the Dow Jones Industrial Average closed higher, gaining 292 points to reach 49,442. The S&P 500 ended the day at 6,944, and the Nasdaq finished at 23,530. However, these gains in the broader market did not extend to crypto stocks, which appear to be operating in a separate, negative market environment today.