- Crypto stocks are in freefall.
- That's despite many firms posting positive earnings for the third financial quarter.
- Macroeconomic headwinds are driving the decline.
Crypto markets are getting bloody.
Not only has Bitcoin’s price plummeted below $90,000, but the shares of some of the biggest names in the industry have lost huge chunks of their value.
That’s despite many of them having reported record results over the past quarter and the increased softening of the regulatory environment for digital assets in the US.
“Equity markets have navigated an earnings season of reasonable results, but sentiment has been overshadowed by novel macro headwinds,” Thomas Perfumo, Global Economist at Kraken, said in a note shared with DL News.
Those headwinds include the lingering fallout from the record 43-day government shutdown, and anxiety surrounding the Federal Reserve’s December interest rate decision.
The CME FedWatch tool places the probability of a December rate cut at around 46%, down 8% since last week.
Interest rate cuts are broadly seen as bullish for riskier assets like stocks and crypto because they make investing in government bonds less attractive and lower borrowing costs.
Beating estimates
Stablecoin issuer Circle is the biggest loser, shedding 39% of its value over the past 30 days. That’s despite the firm posting a 66% jump in revenue in its third quarter earnings report on November 12.
Circle isn’t the only crypto firm to post positive earnings yet see its stock decline.
On October 30, Coinbase reported a quarterly revenue of $1.86 billion, up 25% over the previous quarter, and higher than the estimated $1.8 billion.
Similarly, Galaxy Digital revenue climbed 231% year over year and beat estimates by some 43%, per the firm’s latest financial report published on October 21.
Those positive results haven’t stopped Coinbase shares falling some 23%, and Galaxy’s shares slipping 28% over the past month, however.
Figure also beat Wall Street expectations, registering a 55% increase in net revenue on November 13. It’s the only major crypto firm whose stock is in the green over the past month, posting a 4% gain.
But not all crypto firms have done so well.
On November 10, Gemini reported a $159 million net loss over the past quarter, despite doubling its revenue year over year. The firm’s shares dropped to a record low of $11.57, down 58% from its IPO price in September.
Bullish, the crypto exchange backed by tech investor Peter Thiel, will post its third quarter earnings on November 19.
The firm said in its second quarter earnings report that it expects to generate revenues of at least $69 million, surpassing analyst estimates.
Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.
