Crypto stocks trade down but avoid major collapses on volatile day

Stocks closely tied to bitcoin ended the day underwater as the reverberations from the apparent collapse of the FTX exchange roiled the digital-asset sector, but many of the equities had milder declines than the 8.86% slide in the original cryptocurrency.

There are several potential reasons for this performance, perhaps starting with luck. Markets in the U.S. closed around the exact same time that Binance decided to walk away from its planned acquisition of troubled crypto exchange FTX. In the hour since the deal fell through, bitcoin slid 5% to fall under $16,000 for the first time since November 2020. That decline has the potential to weigh on the market on Thursday.

Additionally, bitcoin is less tied to the fortunes of Sam Bankman-Fried, the former billionaire founder and CEO of FTX, and the exchange’s native FTT token, Solana’s SOL, and SRM, the governance token used in FTX’s decentralized exchange Serum, which runs on top of Solana. Those assets are down 68%, 46%, and 59%, respectively, over the past 24 hours.

As powerful as FTX was in the industry, by nature of its business as a crypto derivatives platform geared toward non-U.S.institutions, it was not seen as a major proxy for mainstream crypto sentiment in the way as Coinbase. The U.S.-based exchange is only down 3.02% on the day. The biggest losers during among publicly traded crypto brokers today were Robinhood and Bakkt, falling 9.72% and 7.10%, respectively.

Bitcoin proxy stocks such as miners and MicroStrategy, which is seen by investors as a leveraged ETF offered a mixed picture. Marathon Digital Holdings was positive on the day, up 3.62%, and Riot Blockchain and Hut8 fell but beat bitcoin by only losing 1.71% and 7.53% respectively. Further down, BitDigital, ClearSpark, Stronghold Digital and MicroStrategy all underperformed bitcoin.

Major metaverse stocks also seemed to be largely unimpacted by today’s trading. The only stock to underperform bitcoin was Roblox, which fell largely due to disappointing Q3 earnings that were released this morning.