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Crypto-Linked Stocks Tumble After FTX Files for Bankruptcy

Bitcoin and ether both fell about 6% following the Chapter 11 filing Friday morning.

Updated May 9, 2023, 4:02 a.m. Published Nov 11, 2022, 2:49 p.m.

Crypto stocks take another hit as FTX files for bankruptcy. (Spencer Platt/Getty Images)

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.

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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.

Bitcoin Stocks Ether COIN Coinbase

Aoyon Ashraf

Aoyon Ashraf is CoinDesk's managing editor for Breaking News. He spent almost a decade at Bloomberg covering equities, commodities and tech. Prior to that, he spent several years on the sellside, financing small-cap companies. Aoyon graduated from University of Toronto with a degree in mining engineering. He holds ETH and BTC, as well as ALGO, ADA, SOL, OP and some other altcoins which are below CoinDesk's disclosure threshold of $1,000.