Coinbase, Robinhood lead US$10b rout in crypto mayhem
ROBINHOOD Markets and Coinbase Global took another beating on Wednesday (Nov 9) as Binance Holdings’s bailed on its deal to buy FTX.com, sending another shock through the rattled crypto industry.
Robinhood shares tanked 14 per cent, while Coinbase dropped 9.5 per cent to a record low - extending this week’s wipeout to more than one-fifth of their market capitalisations. The sell-off in crypto-linked equities erased at least US$10 billion in value, according to data compiled by Bloomberg.
Binance walked away from a deal to takeover FTX which both companies had announced Tuesday - a deal that was meant to “help cover the liquidity crunch” at Sam Bankman-Fried’s troubled crypto exchange. “The issues are beyond our control or ability to help,” Binance said in a statement.
Robinhood was seen as a potential target for FTX after people with knowledge of the matter told Bloomberg News in June that FTX was said to have been exploring a possible acquisition of the company. Coinbase’s slump is a reminder of investor caution over the crypto industry as Binance’s failed rescue of FTX puts a spotlight on the challenges facing its longevity.
Other cryptocurrency-linked stocks extended losses Wednesday as Bitcoin fell 14 per cent to a roughly two-year low amid investor jitters. MicroStrategy sank 20 per cent to the lowest in four months and Riot Blockchain lost 8.1 per cent, while Silvergate Capital tumbled 12 per cent. Galaxy Digital Holdings disclosed a US$76.8 million exposure to the collapsed exchange FTX.com and tumbled 16 per cent to the lowest since October 2020. BLOOMBERG
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