Coinbase, Robinhood Lead $10 Billion Rout in Crypto Mayhem

(Bloomberg) — Robinhood Markets Inc. and Coinbase Global Inc. took another beating Wednesday as Binance Holdings Ltd.’s bailed on its deal to buy FTX.com, sending another shock through the rattled crypto industry.

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Robinhood shares tanked 14%, while Coinbase dropped 9.5% to a record low — extending this week’s wipeout to more than one-fifth of their market capitalizations. The selloff in crypto-linked equities erased at least $10 billion in value, according to data compiled by Bloomberg.

Binance walked away from a deal to takeover FTX which both companies had announced Tuesday — a deal that was meant to “help cover the liquidity crunch” at Sam Bankman-Fried’s troubled crypto exchange. “The issues are beyond our control or ability to help,” Binance said in a statement.

Robinhood was seen as a potential target for FTX after people with knowledge of the matter told Bloomberg News in June that FTX was said to have been exploring a possible acquisition of the company. Coinbase’s slump is a reminder of investor caution over the crypto industry as Binance’s failed rescue of FTX puts a spotlight on the challenges facing its longevity.

Other cryptocurrency-linked stocks extended losses Wednesday as Bitcoin fell 14% to a roughly two-year low amid investor jitters. MicroStrategy Inc. sank 20% to the lowest in four months and Riot Blockchain Inc. lost 8.1%, while Silvergate Capital Corp. tumbled 12%. Galaxy Digital Holdings Ltd. disclosed a $76.8 million exposure to the collapsed exchange FTX.com and tumbled 16% to the lowest since October 2020.

(Updates with share movement throughout, details of Binance’s backing out of deal.)