Crypto stocks are taking a hit Friday as weakness in U.S. stocks spills over into high-risk assets, fueling bitcoin. below $66,000.
Crypto exchange Coinbase (COIN) and digital asset conglomerate Galaxy (GLXY) fell nearly 7%, while exchange Gemini (GEMI) slipped almost 9%, marking one of the group’s steepest losses. Cryptocurrency-friendly broker Robinhood (HOOD) also fell nearly 6%, as its accelerating pace of share buybacks did little to stop the downward trend.
Bitcoin-related balance sheet plays have also declined. Strategy (MSTR) and Twenty One Capital (XXI) plunged about 6%. Ethereum-focused cash names such as Bitmine Immersion (BMNR) and Sharplink Gaming (SBET) were down around 5%.
Miners – many of whom trade as leveraged bets on Bitcoin and AI infrastructure – have extended their decline. Riot Platforms (RIOT), CleanSpark (CLSK), IREN (IREN), HIVE Digital (HIVE), and Hut 8 (HUT) all posted losses of 5-8%.
Even MARA (MARA) and Bitdeer (BTDR), which outperformed on Thursday, gave up all their gains and fell 6% and 8%, respectively, joining the sector’s slide.
A balance sheet of 17,000 billion dollars
The Federal Reserve faces an increasingly complex context, balancing new inflationary pressures from rising oil prices against signs of a deterioration in the labor market.
Richmond Fed President Tom Barkin warned that rising gas prices could hurt consumer spending, while calling hiring conditions “fragile.” Meanwhile, Philadelphia Fed President Anna Paulson said the war in Iran created “new risks to inflation and growth.”
The yield on 10-year Treasury notes, which rose to nearly 4.5% earlier Friday, erased today’s rise following remarks from central bankers. The two-year yield, more sensitive to Fed policy, fell to 3.91% after rising to 4.03%.
Yet investors have stopped expecting rate cuts this year and are now looking at a rate hike by the central bank in the face of rising inflation.
The sell-off in recent months has been widespread across stocks, with market caps of around $17 trillion erased from record highs in the Magnificent Seven – the seven largest tech stocks, including Nvidia (NVDA), Google (GOOG) and Microsoft (MSFT) – gold, silver and bitcoin. .
Bitcoin hit its all-time high in early October at $126,000, while gold, silver and U.S. stocks peaked in late January before reversing sharply. Since then, bitcoin has fallen about 45%, silver 45%, gold about 20%, and the Magnificent Seven have all seen double-digit declines from their highs.
The tech-heavy Nasdaq 100 index has now entered correction territory, trading more than 10% off its January all-time high. The broader S&P 500 index is also moving closer to a correction, currently down 8.5%.
Although bonds have also been hit hard, global fixed income markets remain under pressure, with the iShares 20+ Year Treasury Bond ETF (TLT) down about 0.3% on Friday and 5% over the past month since the conflict began.
Over the same period, the S&P 500 Index has fallen around 6%, highlighting the underperformance of the traditional 60/40 portfolio as global yields continue to rise, weighing on sovereign debt markets.
Relief Monday, no risk Friday
This week followed a familiar pattern seen since the start of the Middle East conflict in late February, with strong gains on Monday, partly driven by relief that the “Black Monday” scenario did not occur, averaging around 3%, followed by steady weak profit-taking as the week progressed, particularly as optimism faded around the full reopening of the Strait of Hormuz.
Thursday and Friday typically see performance deteriorate further as investors reduce risk ahead of the weekend amid continued geopolitical uncertainty.
