Crypto-Linked Stocks Tumble After FTX Files for Bankruptcy
Bitcoin and ether both fell about 6% following the Chapter 11 filing Friday morning.
Nov 11, 2022 at 2:49 p.m. UTC:format(webp)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/67JTSMVYGFBPRBNYDG3KXO5YCM.jpg)
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Cryptocurrency-exposed equities plunged early Friday, reversing Thursday's modest bounce after FTX filed for Chapter 11 bankruptcy protection in the U.S.
Crypto exchange Coinbase (COIN) fell nearly 8%, while shares of MicroStrategy (MSTR) – which holds about 130,000 bitcoins – dropped 10%. Crypto-focused bank Silvergate (SI) tumbled 14%, while the stocks of bitcoin miners such as Riot Blockchain (RIOT) and Marathon Digital (MARA) also took sizable hits.
The two largest cryptocurrencies, bitcoin (BTC) and ether (ETH) both declined about 6% in wake of the filing, with similar percentage declines seen across the crypto sector.
Today's declines reverse a short-lived bounce for crypto and crypto-linked stocks, both of which rose Thursday after a softer-than-expected Consumer Price Index report gave hope that the U.S. Federal Reserve might slow its pace of rate hikes.
FTX Group, which includes the FTX.com entity as well as FTX US, Alameda Research and “approximately 130 additional affiliated companies” have all filed for chapter 11 bankruptcy proceedings, according to a press release. CEO and founder Sam Bankman-Fried also resigned his role, but will "assist in an orderly transition." John Ray III is the new CEO.
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Aoyon Ashraf is managing editor with more than a decade of experience in covering equity markets