Crypto Stocks Continue Drop as Binance Walks Away from FTX Deal
Cryptocurrency-exposed equities continued their dip Wednesday amid concerns around FTX’s financial health as Binance confirmed Wednesday afternoon that the exchange scrapped its letter of intent to buy rival exchange FTX.
Shares of tech firm MicroStrategy (MSTR, which holds about 130,000 bitcoins, fell 20% Wednesday. Crypto exchange Coinbase (COIN) dropped 9.5%. Crypto-focused bank Silvergate (SI) declined 12%, while financial services firm Galaxy Digital (GLXY.TO) fell 16% in Toronto stock exchange. The stocks of bitcoin miners such as Riot Blockchain (RIOT) and Marathon Digital (MARA) also took a hit.
Bitcoin (BTC) fell about 15% to below $16,000, while Ether (ETH) dropped 15%, trading near $1,100.
Aside from Binance-FTX failed deal, the U.S midterm election has been a key focus today, though crypto has spilled over into the broader market Wednesday. The tech-focused Nasdaq Composite Index (IXIC) fell about 2.5%.
“What is complicating today’s mood on Wall Street is that the liquidity crisis for FTX is spilling over into other cryptos,” Edward Moya, Oanda’s senior markets analyst said in a note Wednesday afternoon. “FTX was viewed as one of the so-called safe crypto players and their demise is raising concerns that other key crypto companies could be vulnerable here.”