Stocks for crypto-related firms fall amid wider market rout

Capital Markets • May 19, 2021, 10:35AM EDT

The share price of companies operating in the crypto market has fallen sharply amid the wider rout in coins like bitcoin and ether.

Coinbase—the poster child for retail crypto trading—is trading down more than 9% at $215 a share. That's a decline of more than 34% since its listing debut in mid-April.

Elsewhere, MicroStrategy—which has purchased tens of thousands of bitcoin on its balance sheet and is viewed by some as a proxy for a bitcoin ETF—is trading down 11.85% at $429 a share.

Galaxy Digital, which has surged since the beginning of the year, is down 14.65%. Its CEO, billionaire Mike Novogratz, said on CNBC that the market was showing signs of "capitulation."

It's not clear exactly what's behind the market turmoil, but several traders have told The Block that derivatives traders offshore were positioned to heavily short gamma—meaning sell to hedge—at the $40,000 price level, exacerbating the market sell-off.

In a note to counter-parties, Genesis Global Trading attributed the decline to "forced liquidations/leveraged close outs."

About Author

Frank Chaparro is the Editor At Large at The Block. Chaparro started his career at Business Insider, where he specialized in the intersection of digital assets and Wall Street, market structure, and financial technology. Soon after joining Business Insider out of Fordham University, Chaparro was interviewing top finance and tech executives, including billionaire Mark Cuban, “Flash Boys” star Brad Katsuyama, Cboe Global Markets CEO Ed Tilly, and New York Stock Exchange President Tom Farley. In 2018, he become a sought after reporter in the crypto world, interviewing luminaries such as Tyler Winklevoss, the cofounder of Gemini, Jeremy Allaire, the CEO of Circle, and Fundstrat head Tom Lee. He runs his own podcast The Scoop and writes a biweekly eponymous newsletter. He leads special projects, including The Block's flagship podcast, The Scoop. Prior to The Block, he held roles at Business Insider, NPR, and Nasdaq. For inquiries or tips, email [email protected].