A broad sell-off in tech stocks weighed even more heavily on crypto-focused companies, highlighting a growing divergence between digital asset stocks and the U.S. stock market as a whole.
Shares of Coinbase (COIN) and Circle (CRCL) are down 69% and 72%, respectively, from their all-time highs. These declines exceed declines seen at several major tech companies, including Oracle (ORCL), Salesforce (CRM), Netflix (NFLX) and Palantir (PLTR), which are down between 48% and 57% from their highs, according to data from The Kobeissi Letter.
For comparison, the large-cap S&P 500 index is down just 3.5% from its recent peak.
Source: Kobeissi’s letter
The decline in tech stocks reflects growing fears that advances in artificial intelligence could disrupt existing business models in parts of the industry. Semiconductor stocks generally held up better despite bouts of volatility, while cryptocurrency-related stocks remained under pressure amid broader weakness in digital asset markets and uneven progress in overall legislation on the structure of the U.S. cryptocurrency market.
Negative sentiment towards the sector intensified after Bitcoin fell below $60,000 this week, extending its decline to more than 54% from its October high. Ether has also been under heavy selling pressure, recently falling to around $1,500, about 69% below last year’s high.
Bear market conditions also weighed on corporate profits, with Coinbase reporting first-quarter results below Wall Street expectations. Revenue fell 21% from the previous quarter, while the company reported a loss of $1.49 per share, compared to analysts’ expectations for a profit of $0.27 per share.
Analysts downgrade crypto market outlook for 2026 despite strong institutional credit
The prolonged downturn in the crypto market has prompted analysts at 21Shares to lower their expectations for 2026, arguing that digital asset prices have significantly underperformed the sector’s underlying fundamentals.
In its mid-year outlook, 21shares said institutional adoption continues to strengthen, particularly in the stablecoin, tokenization and prediction markets. However, the asset manager argued that Bitcoin’s four-year market cycle remains the dominant force determining crypto prices.
According to the report, growing institutional ownership helped moderate Bitcoin’s declines but did not fundamentally change its cyclical behavior.
Bitcoin’s price action this year suggests that the four-year cycle remains intact. Source: 21shares
“The Bitcoin cycle is evolving, but it is not yet broken,” 21Shares said, reversing its earlier prediction that the four-year cycle had become obsolete.
Related: Exodus of Ethereum Foundation leadership continues with director’s departure
