Coinbase stock, cryptos continue to sell off following FTX meltdown

Yahoo Finance Live anchors discuss how the FTX collapse continues to apply pressure to global crypto markets.

Video Transcript

[AUDIO LOGO]

BRIAN SOZZI: Welcome back. There's still some time before we have that opening bell on Wall Street. So let's take a look at what's trending here this morning. We're still watching a lot of these crypto names, guys, off of the ongoing FTX downfall. We're seeing crypto prices under pressure. Also this morning, flagging Coinbase under pressure. Even Robinhood down almost 2% here in the premarket.

JULIE HYMAN: Yeah, there was another court filing related to the bankruptcy proceeding over the weekend on Saturday. And it revealed that the company owes its 50 biggest creditors almost $3.1 billion, about $1.45 billion to its top 10 creditors. We don't know who those creditors are. But obviously, there's a lot of speculation about this besides some of the fallout that we've heard about already.

So what we were seeing over the weekend is as that speculation was out there, who is affected? What's it going to do to the crypto prices? We see crypto prices come down. And then of course, we see a lot of those crypto-related companies come down too.

BRAD SMITH: Yeah, most notably as we were looking at the share price action, at least premarket of Robinhood and Coinbase, these are two companies that as they were going public, continued to sell the Street on their ability to get more active and funded accounts on their platforms and then sustain them for an extended period of time. You have a now wave of people, wave of accounts, that have decided to hit the cash out button.

And so where you've, in the other spectrum of crypto, had to see some of those abilities for withdrawals actually paused right now, that is just sending this broader sentiment and tenor, this negative tenor throughout the crypto space. And it's impacting them most notably, I think, for Robinhood and Coinbase because there you've got investors that are saying, OK, you've been staking so much of your growth on the ability to retain some of the cryptocurrency customers. And sans them, what is the methodology? What's the actual way forward from here? Because equity markets ain't doing well for anybody right now.

BRIAN SOZZI: Yeah, it just all seems like a black box. On a positive note, Bank of America, I believe, in a note out this morning, saying Coinbase is not in the same boat as an FTX. So trying to find a little bit of a silver lining here on this holiday shortened week.

JULIE HYMAN: Yeah, we should also point out, by the way, these crypto names are very heavily shorted, right? So that's just something that can play into the underlying dynamics for some of these stocks when you have them moving around with big swings. Either you have short covering or people-- and by the way, it's expensive to short these stocks because they have fallen by so much already. But people are still doing it.