Stealth Bear Market Hits Crypto Stocks as Coinbase, Circle, Robinhood Fall 40-56%
Crypto-linked stocks Coinbase, Circle, and Robinhood have fallen 40-56% from their highs while the S&P 500 trades near record levels, creating what the Kobeissi Letter calls a stealth bear market.
Since March 30, 10 stocks have driven 70% of the S&P 500's gains, creating a misleading picture of market health. While the broader index sits near records, crypto-linked equities have entered a stealth bear market, with Coinbase down 56%, Circle 44%, and Robinhood 40% from their highs.
Market Concentration
Kobeissi Letter identifies 20 technology stocks in bear market territory, led by AppLovin at 65%. Nvidia alone contributed 13% to the S&P 500's gains, yet other major contributors like Micron and Alphabet remain 24% and 28% below their highs respectively.
Crypto Company Challenges
Circle, which issues USD Coin, saw its shares fall 11% intraday in September after a crypto market structure bill stalled in the Senate. Robinhood posted record third-quarter revenue of $1.4 billion, yet diluted earnings per share dropped 16% year-over-year.
Coinbase prepares to report third-quarter results Thursday with revenue expectations near $1.2 billion, a 36% drop from a year earlier. Analysts forecast a loss, with consumer transaction revenue down 20% year-over-year and spot trading volume dropping 25% sequentially.
Bitcoin and Market Outlook
Bitcoin struggles to maintain its rally above $80,000, repeatedly dipping below that level despite a $6 billion US Treasury bond buyback. Kobeissi expects a sharp rally if energy and rate pressure ease, but this would depend on market breadth expanding beyond the current 10 dominant stocks.
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