Bad news dominates the crypto media headlines and the happiest news of May 12 was the unexpected collapse of the Terra ecosystem. In addition to the weakness seen in equities, blockchain startups and listed companies exposed to cryptocurrency mining have also declined sharply.
Bleeding in bitcoin mining stocks…
Mining investors probably wish they had bought bitcoin in early 2022, as most bitcoin mining stocks have underperformed bitcoin by a wide margin. pic.twitter.com/anSoUEoUJ1
— Jaron Melrud (@JMellerud) 11 May 2022
While it may be easy to blame the current pullback solely on Terra’s explosion, the truth is that the price of bitcoin mining stocks has largely mirrored BTC’s performance since its peak in November 2020.
It is likely that the price of these stocks will struggle as long as bitcoin continues to bleed less in the face of several headwinds, including rising interest rates, inflation and global conflict.
crypto financial services
It’s not just bitcoin mining stocks that have come under pressure of late as all sorts of companies that have any sort of affiliation with cryptocurrencies are feeling the heat in May.
Coinbase (COIN) stock price hit an all-time low of $41.23 in the early trading hours of May 12, following the release of forward-looking statements predicting a continued decline in active users and trading volume.
Robinhood also plunged its stock price to a new all-time low of $7.73 on May 12, a day after the firm revealed that its crypto transaction revenue fell 39% year-on-year in Q1 to $88 in 2021. million to $54 million. 2022.
While Robinhood is not a crypto-only exchange, approximately 18% of its Q1 net revenue came from crypto-related transactions, which is important when comparing the size of the crypto market to other markets supported on the platform.
related: Bitcoin Fights To Keep $29K Over Regulation Fears And Terra’s UST Implant Hits Crypto Hard
Weakness spread in the technical sector
The decline in cryptocurrency-related stocks reflects a backdrop of widespread weakness in financial markets, particularly the tech sector.
Several years of optimistic projections and quantitative easing have resulted in an overvalued and volatile technical sector that turns out to be fits when expectations are lower.
Once the darling of the mighty stock market, FAANG shares have shrugged off the charge, weighing down on the Nasdaq, which closed April with its worst monthly performance since the 2008 financial crisis.
Losses for the Nasdaq intensified in May as the benchmark index fell 9.15% to its lowest level since November 2020.
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