Crypto stocks dropped two to three times as far as a fund that holds bitcoin directly, as the Nasdaq slid about 3% and a Fed official called for another rate increase "soon." Bitcoin is on track for a monthly loss of nearly 8%.
The coin held up better than the companies built around it.
By early afternoon Friday, Coinbase was down about 14% at $138.10, after touching a 52-week low of $136.90. Stablecoin issuer Circle fell about 10.8% to $71.36, Robinhood about 9.6% to $82.79 and Strategy, the largest corporate holder of bitcoin, about 9% to $128.93.
Over the same period, measured from Thursday's close, the iShares Bitcoin Trust fell about 4.8% to $43.54. Bitcoin itself traded near $77,060, about 1% lower than in early Friday trading and still about 2% above Strategy's average purchase cost of roughly $75,450.
Three pressures at once
The first was the stock market. The Nasdaq Composite fell about 3.1%, led by a 30% drop in Intel, and crypto stocks have long traded as high-beta technology names.
The second was rates. St. Louis Fed President Alberto Musalem said "additional firming of monetary policy will be necessary, and soon." A December hike is already largely priced.
The third was crypto-specific. The Binance breach has put exchange risk back in front of investors, and Coinbase reported a 35% drop in total revenue this week, followed by price-target cuts from six brokerages.
Each of those fits the day's moves. None can be separated cleanly from the others.
Where bitcoin stands
Bitcoin closed September at about $83,556. At Friday's price it is down about 7.8% for October, with one trading day left, and about 12% for the year.
Flows into U.S. spot bitcoin ETFs have not cracked. They took in about $17 million on Thursday, a fourth straight day of inflows totaling about $440 million for the week. Ether ETFs went the other way, losing about $105 million on Thursday, their fourth straight day of outflows, and about $1.45 billion for October.
Crypto or tech?
If the equity selloff is mainly about rates and the AI trade, crypto stocks should track the Nasdaq from here regardless of what bitcoin does. If it is mainly about exchange risk, Binance's reopening and proof of reserves next week matter more than the Fed.
What to watch
Month-end closing prices, Friday's ETF flows, Binance's withdrawal restart and MSCI's Nov. 11 index review announcement, which will show how Strategy is treated under the index provider's new eligibility rules.