Crypto Is Down, but Crypto-Focused Stocks Are Worse

While the values of cryptocurrencies slide, the values of companies that maintain markets for them are sliding even faster, the Wall Street Journal reports.

According to the Journal, citing data from CoinMarketCap, bitcoin is off 11 percent in 2022 and Ether is down 16 percent. The combined market for all the major cryptocurrencies is off 19 percent over the same period.

That’s a lot better than the declines of up to 60 percent in publicly traded companies that focus on the crypto market, the Journal noted, citing data from FactSet.

Year-to-date, as of market closings on April 19, share price changes were: Coinbase, down almost 40 percent; Silvergate Capital Corp., down 13 percent ; Marathon Digital Holdings, down 35 percent; Riot Blockchain, down 35 percent; and TeraWulf, down 60 percent.

Experts quoted by the Journal said it’s not unusual for the companies serving a market to suffer more during a downturn than the market’s underlying commodity. Cryptocurrency exchanges are hurting, the Journal reported, because trading volumes are down substantially.

Analysts told the Journal stocks of crypto-mining companies — the firms whose computers run the transactions that create the blockchain — are down because they tend to be owned by individual investors. In general, individual investors trade in and out of share more than institutional investors.

The market’s turmoil comes in a climate of tepid adoption by members of Generation Z — those born in 1997 or more recently, according PYMNTS’ 2022 U.S. Crypto Consumer report, released Monday (April 18). That report found that members of Generation Z showed little interest in using crypto for business transactions compared to their predecessors.

Read on: PYMNTS Data Show Generation Z Lagging in Crypto Use, Consumer Payments