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.
“My money would be on deribit short gamma guys forcing liquidations and making it even worse for themselves and dragging the whole market down,” said Evgeny Gaevoy, CEO of market making firm Wintermute, in a message.
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