Crypto stocks were hit hard on Friday as weakness in US stocks spilled through high-risk assets and drove bitcoin under $66,000.
Crypto exchange Coinbase ( COIN ) and digital asset conglomerate Galaxy ( GLXY ) fell nearly 7%, while exchange Gemini ( GEMI ) fell nearly 9%, marking one of the steepest losses in the group. Crypto-friendly broker Robinhood ( HOOD ) also fell nearly 6% as an increase in the pace of share buybacks did little to halt the downward trend.
Bitcoin-linked balance games also fell. Strategy ( MSTR ) and Twenty One Capital ( XXI ) fell about 6%. Ethereum-focused treasury names such as Bitmine Immersion (BMNR) and Sharplink Gaming (SBET) fell around 5%.
Miners — many of whom trade as leveraged bets on both bitcoin and AI infrastructure — extended their decline. Riot Platforms (RIOT), CleanSpark (CLSK), IREN (IREN), HIVE Digital (HIVE), and Hut 8 (HUT) all lost 5%-8%.
Even MARA (MARA) and Bitdeer (BTDR), which outperformed on Thursday, have given back all their gains, falling 6% and 8% respectively, joining the sector-wide plunge.
$17 trillion wiped out
The Federal Reserve faces an increasingly complicated backdrop, weighing renewed inflationary pressures from rising oil prices against signs of a worsening labor market.
Richmond Fed President Tom Barkin warned that higher gas costs could weigh on consumer spending while describing employment conditions as “fragile.” Meanwhile, Philadelphia Fed President Anna Paulson said the war in Iran created “new risks to both inflation and growth.”
The 10-year government bond yield, which hit nearly 4.5% earlier Friday, erased today’s rise after the central bankers’ comments. The two-year yield, which is more sensitive to Fed policy, eased back to 3.91% after earlier rising to 4.03%.
Still, investors have turned from predominantly expecting interest rate cuts this year to considering central bank rate hikes in the face of rising inflation.
The sell-off in recent months has been broad across stocks, with about $17 trillion in market value wiped from peak levels across the Magnificent Seven — the seven largest technology stocks including Nvidia ( NVDA ), Google ( GOOG ) and Microsoft ( MSFT ) — gold, silver and bitcoin .
Bitcoin reached its all-time high in early October at $126,000, while gold, silver and US stocks peaked in late January before reversing sharply. Since then, bitcoin is down about 45%, silver is down 45%, gold about 20%, and the Magnificent Seven have all gone into double-digit pullbacks from their peaks.
The tech-heavy Nasdaq 100 index has now entered correction territory, trading down more than 10% from its January high. The broad-based S&P 500 is also closer to a correction, currently down 8.5%.
Although bonds have also been hit hard, global fixed income markets remain under heavy 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.
In the same period, the S&P 500 has fallen by approx. 6%, underscoring the underperformance of the traditional 60/40 portfolio as global interest rates continue to rise, weighing on sovereign debt markets.
Monday relief, Friday risk-off
This week has followed a familiar playbook seen since the conflict in the Middle East began in late February, with strong gains on Monday, driven in part by relief that the “Black Monday” scenario did not occur, averaging around 3%, followed by steady gains that factor in weakness as the week progresses, particularly as optimism fades around the fully reopening of the Strait of Hormuz.
Performance typically deteriorates further on Thursday and Friday as investors reduce risk ahead of the weekend amid ongoing geopolitical uncertainty.
