SAN ANSELMO, CALIFORNIA – JUNE 06: In this photo illustration, the Coinbase logo is displayed on a screen on June 06, 2023 in San Anselmo, California. The Securities and Exchange Commission has filed a lawsuit against cryptocurrency exchange Coinbase for allegedly violating securities laws by operating as an exchange, a broker and a clearing house without registering with the Securities and Exchange Commission. (Photo illustration by Justin Sullivan/Getty Images)
Justin Sullivan | Getty Images
Cryptocurrency Exchange Cryptocurrency just ended its worst week of the year. Bitcoin miners Digital Marathon down 20%. A basket of crypto-related stocks tracked by Schwab fell to its lowest level since February.
The sector-wide sell-off reflects growing concerns about the health of the U.S. economy and tracks a broader decline in prices. bitcoin, ether and risk assets in general. The tech-heavy Nasdaq slide 5.8% for the week, its worst performance since January 2022.
Aside from macro pressures, the calendar is not favorable for cryptocurrencies. According to CoinSeptember is historically a difficult trading month for crypto assets, with bitcoin losing an average of 4.8%. Crypto Fear and Greed IndexCryptocurrency market sentiment gauge, which is in the “Extreme Fear” zone, shows investors are worried about price volatility.
Bitcoin price fell to its lowest level since February, down 4% in the past 24 hours to around $54,000.
Bitcoin and Ether prices, as of today
In a week shortened by the Labor Day holiday, Tuesday saw the steepest sell-off in the broader market after weak production data sparking fears of a recession. 11 bitcoin exchange-traded funds in the United States have worst day in more than four months Following the report, more than $287 million was withdrawn from ETFs.
The data isn’t good until the end of the week. On Friday, the Bureau of Labor Statistics reported Labor market cools as August payrolls miss expectations.
Coinbase is having one of its worst trading weeks this year.
“The recent results from the US labor market have acted as a testing moment for risk assets like bitcoin, as the labor market is seen as a key area that could influence the Fed’s decision to cut interest rates this month,” Leena ElDeeb, research analyst at ETF issuer 21Shares, said in an email.
The total market capitalization of cryptocurrencies has fallen nearly 30% from its 2024 peak of $2.67 trillion and now stands at $1.9 trillion. Altcoins like Solana SOL token, Cryptocurrency and Cardano ADA all fell more than 8% over the past week. Ether, the world’s second-largest cryptocurrency, fell 12% to around $2,200.
Crypto stocks hit hardest
While it was a tough week for risk assets across the board, investors heavily invested in crypto stocks fared particularly badly.
Schwab Asset Management’s Crypto-Themed ETF ((STCE)include Micro strategy, Digital Marathon, Riot Blockchainand Coinbase down 11%.
Coinbase, stucklegal battle with SEC about whether the exchange was involved in the sale of unregistered securities, plummeted 20% to its lowest level since February. MicroStrategy, the bitcoin collection company founded by Michael Saylor, fell 14% for the week following a 12% drop last week.
Top bitcoin miners all ended the week with double-digit losses, led by CleanSparkdown 24%. Riot Platform lost 17%.
The slide is a continuation of last month’s. However, JPMorgan Chase Even as token and asset prices plummeted, trading increased in August, with total average daily volume up 8% month-on-month, analysts said in a note Friday, citing TradingView estimates.
Coinbase and Marathon Digital this year
As investors look ahead to what’s next, one area of major focus is the Federal Reserve.
The central bank could cut its benchmark interest rate for the first time in four years when it meets on September 17-18. Fed Chair Jerome Powell said last month that it was “time” to adjust interest rates. Analysts expect a 0.25% or 0.5% cut from the current rate of 5.25%-5.5%.
Loose monetary policy is typically good for risk assets like cryptocurrencies, which tend to attract more investment inflows as borrowing costs fall.
The latest inflation data comes out on Wednesday with the August Consumer Price Index. This figure is another important indicator the Fed will be watching ahead of its September meeting.
The U.S. presidential debate on Tuesday could also prove to be a price-boosting driver in the cryptocurrency market. Republican candidate Donald Trump has self-branding as a pro-crypto candidate for president and recently spearheaded the biggest bitcoin event of the year in Nashville. Many people in the industry see a potential second Trump presidency as a catalyst for the industry, in part because he has vowed to remove the SEC chairman Gary Genslerwho has long been considered a cryptocurrency skeptic.
