Crypto-linked stocks declined significantly Friday as a major security incident at Binance collided with a broader technology selloff driven by concerns over artificial intelligence investment costs.
Coinbase shares fell 12.4% to $140.70, while bitcoin treasury company Strategy dropped more than 6% to $132.20. Other crypto stocks also declined, including Securitize down 8.7%, American Bitcoin falling 9.3%, Bullish down 9.2%, Circle down 8.3%, and Galaxy Digital down 8.1%.
Binance Security Breach
Binance disclosed a security breach on Thursday affecting approximately $6.3 billion in assets. The exchange said an attacker gained access through a compromised employee laptop and submitted unauthorized withdrawals. Roughly $3 billion has been frozen onchain, and Binance said it will cover losses using its Secure Asset Fund for Users (SAFU) and corporate resources. The company found no evidence that private wallet keys were compromised.
Bitcoin fell toward $76,000 Friday morning following the breach announcement before recovering to just under $77,900, representing a nearly 5% decline over 24 hours. More than $1.5 billion of leveraged crypto positions were liquidated during the same period.
Tech Sector Pressures
The crypto selloff coincided with broader technology stock weakness driven by concerns over artificial intelligence infrastructure spending. Alphabet declined 13% on Thursday, while earnings reports from Amazon and Intel raised questions about returns on massive AI investments. Intel shares fell more than 28% Friday following an underwhelming earnings report.
Earnings Unable to Support Stock Prices
Strong quarterly results failed to shield crypto stocks from market pressure. Coinbase reported $719 million in net income for the third quarter, though adjusted net income was only $78 million after removing investment and crypto-asset gains. Adjusted EBITDA reached $333 million, up 60% sequentially. Transaction revenue fell to $590 million from approximately $1 billion a year prior, while total revenue declined to $1.22 billion from $1.87 billion.
Strategy reported $19.53 billion in net income and $44.75 in diluted earnings per share, largely reflecting gains on its bitcoin holdings. The company held 848,517 BTC as of October 25, while quarterly revenue declined 3% to $125.4 million.
The sharp declines in both stocks suggest investors are focusing on underlying market weakness and future conditions rather than backward-looking earnings.
