Coinbase and Robinhood lead a $10 billion rout in Crypto Mayhem

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(Bloomberg) – Robinhood Markets Inc. and Coinbase Global Inc. suffered another beating on Wednesday as Binance Holdings Ltd. bails out its deal to buy FTX.com, sending another shock through the shaken crypto industry.

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Shares of Robinhood fell 14%, while Coinbase fell 9.5% to a record low – extending this week’s wipeout to more than a fifth of their market capitalizations. The sell-off in crypto-related stocks wiped out at least $10 billion in value, according to data compiled by Bloomberg.

Binance backed out of a deal to take over FTX that the two companies announced on Tuesday — a deal that was meant to “help cover the liquidity crunch” at Sam Bankman-Fried’s struggling crypto exchange. “The issues are beyond our control or our ability to help,” Binance said in a statement.

Robinhood was seen as a potential target for FTX after people with knowledge of the matter told Bloomberg News in June that FTX was reportedly exploring a possible acquisition of the company. Coinbase’s collapse is a reminder of investor caution towards the crypto industry, as Binance’s failure to bail out FTX highlights the challenges facing its longevity.

Other cryptocurrency-related stocks extended losses on Wednesday as Bitcoin fell 14% to a roughly two-year low amid investor jitters. MicroStrategy Inc. fell 20% to a four-month low and Riot Blockchain Inc. lost 8.1%, while Silvergate Capital Corp. fell 12%. Galaxy Digital Holdings Ltd. disclosed $76.8 million exposure to collapsed exchange FTX.com and fell 16% to the lowest since October 2020.

(Updates with stock movement throughout, details on Binance’s withdrawal from the deal.)

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