Cryptocurrency-exposed stocks rebounded strongly on Friday after suffering a severe setback this week from falling crypto prices, weak earnings and stablecoin fears.
Coinbase Global (COIN) rose nearly 18%, MicroStrategy (MSTR) gained over 21%, and Toronto-listed Galaxy Digital Holdings (GLXY) rose 14%. Other gainers included cryptocurrency-focused bank Silvergate Capital (SI), up 23%, and crypto broker Voyager Digital (VYGVF), up 24%.
Bitcoin mining stocks also gained significantly on Friday, led by CleanSpark (CLSK) and Hut 8 (HUT).
Gains in bitcoin (BTC), up 4% in the past 24 hours, and ether (ETH), up 5%, as well as a broader rally in tech stocks helped as investors have fled high-growth tech stocks and riskier crypto assets recently. The tech-heavy Nasdaq Composite Index rose over 3% on Friday.
Coinbase received a much-needed boost after the company reported weaker-than-expected results on Tuesday, causing the company's stock to fall as much as 34% this week. Oppenheimer defended the company's 10-Q risk disclosure that led to investor concerns in a note Thursday, saying CEO Brian Armstrong's filing and tweet were "grossly misunderstood and taken out of context." Analyst Owen Lau maintains an "outperform" rating and $197 price target.
Shares of MicroStrategy, which holds billions of dollars worth of bitcoin on its balance sheet, fell as much as 45% at times this week. Despite the recent bitcoin declines, CEO Michael Saylor tweeted Tuesday that the company's bitcoin-backed loans were no cause for concern.
The collapse of algorithmic stablecoin TerraUST (UST) and the Terra ecosystem (LUNA) also sent crypto prices down this week.
"The extent of the damage caused by the depegging of recent stablecoins and the collapse of LUNA is unknown and will likely continue to play out in the coming weeks, but we expect recent events in the crypto market to be catalysts for regulation, particularly related to stablecoins, which we believe would be welcomed by investors," Chris Allen, an equity analyst at Compass Point, said in a note Friday.
Elsewhere, Robinhood (HOOD), which has a significant crypto trading business, surged more than 26% on Friday after it was announced that FTX CEO Sam Bankman-Fried had acquired a 7.6% stake in the online brokerage firm.