While the S&P 500 is up 10% this year, driven by the AI boom, public crypto has unfortunately gone the other way. This year Bitcoin is down 13%, and the average crypto exchange and broker on our snapshot is down 49%
Having missed the gains from the AI boom, you’d think crypto would hold up better as AI stocks slide. That has not been the case.
In the last two weeks, negative AI sentiment has taken the S&P 500 down less than 2%, the Nasdaq 3% and Nvidia 6%, with Friday the Nasdaq’s worst day since June. Over the same period, crypto fell further. Bitcoin dropped 6%, and the average crypto exchange and broker fell 11%, about twice as much as Nvidia, led by Securitize down 26%, Gemini 22% and Coinbase 20%.
Crypto also had its own bad news. Binance was hit by a $6.3 billion hack on Thursday night, the largest on record, and Coinbase fell 14% on Friday after reporting Q3 revenue down 35% from a year ago.
Crypto stocks sat out the AI rally but not the AI selloff, and with their own problems on top, they’re falling harder than the AI companies themselves. That’s a tough spot to be in.
The good news is that the businesses are holding up better than the stocks. Nearly half of Coinbase’s Q3 revenue came from subscriptions and services, which depend less on trading, and that line grew from Q2. Coinbase has also gained trading share four quarters in a row, and Robinhood just posted record revenue. Across our snapshot, analysts still expect the average exchange and broker to grow revenue 9% this year, even with their stocks down 48%.
