SAN ANSELMO, Calif. – JUNE 6: In this photo illustration, the Coinbase logo is displayed on a screen on June 6, 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, broker-dealer and clearing agency without registering with the SEC. (Illustration by Justin Sullivan/Getty Images)
Justin Sullivan | Getty Images
Cryptocurrency exchange Coinbase It just finished its worst week of the year. Bitcoin Miner Digital Marathon Down 20%. A basket of cryptocurrency-related stocks that it tracks. Schwab It fell to its lowest level since February.
The broad-based sell-off across the industry reflected growing concerns about the health of the U.S. economy and tracked a broader decline in prices. Bitcoin, ether And riskier assets in general. The technology-heavy Nasdaq fell 5.8% for the week, its worst performance since January 2022.
In addition to the macroeconomic pressures, the calendar is not doing crypto any favors. According to CoinGlass, September has historically been a tough month to trade for crypto assets, with Bitcoin posting an average loss of 4.8%. The Crypto Fear & Greed Index, a measure of crypto market sentiment, is in the “extreme fear” zone, indicating that investors are concerned about price movements.
Bitcoin has fallen to its lowest level since February, falling 4% in the last 24 hours to around $54,000.
Bitcoin and Ethereum Prices So Far This Year
In a week shortened by the Labor Day holiday, Tuesday saw the broadest selloff in the broader market after weak manufacturing data raised concerns about a slowing economy. The 11 U.S. exchange-traded funds had their worst day in more than four months after the report, with more than $287 million collectively pulled from the ETFs.
The data was bad until the end of the week. On Friday, the Bureau of Labor Statistics reported a slowdown in the labor market with August payrolls falling short of expectations.
Coinbase had one of its worst trading weeks this year.
“The recent US labor market results were a moment of truth for risk assets like Bitcoin, as the labor market is the key sector that could influence the Fed’s decision to cut interest rates this month,” Lina Eldeeb, a research analyst at exchange-traded fund issuer 21Shares, said in an email.
The total market cap of cryptocurrencies has fallen by about 30% from its peak in 2024 of $2.67 trillion, and is now at $1.9 trillion. Altcoins like Solana Sol token, Ripple currency And Cardano ADA All cryptocurrencies have fallen by more than 8% over the past week. Ethereum, the world’s second-largest cryptocurrency, has fallen by 12% to around $2,200.
Crypto stocks are the hardest hit
While it has been a tough week for risk assets of all kinds, investors who are over-invested in cryptocurrency stocks have had a particularly bad day.
Schwab Asset Management's exchange-traded fund (STCE), which includes MicroStrategy, Marathon Digital, Riot Blockchain and Coinbase, fell 11%.
Shares of Coinbase, which is locked in a legal battle with the U.S. Securities and Exchange Commission over whether the exchange engaged in unregistered sales of securities, fell 20% to their lowest level since February. Shares of MicroStrategy, the bitcoin mining company founded by Michael Saylor, fell 14% for the week after falling 12% the previous week.
All major Bitcoin mining companies ended the week with double-digit declines, led by Clean Spark24% decrease. Riot platforms Lost 17%.
The continued decline is a continuation of last month. However, JPMorgan Chase Even as token and asset prices fell sharply, trading increased in August, with total average daily volume up 8% from the previous month, analysts said in a note on Friday, citing TradingView estimates.
Coinbase and Marathon Digital this year
As investors turn to what's next, one big area of 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 Sept. 17 and 18. Fed Chairman Jerome Powell said last month that “the time has come” to adjust interest-rate policy. Analysts expect a cut of 0.25% or 0.5% from the current rate of 5.25%-5.5%.
Looser monetary policy is usually a good thing for risky assets like cryptocurrencies, which tend to see more investor inflows when borrowing costs fall.
The latest inflation report comes on Wednesday with the release of the August consumer price index, another key gauge the Fed will look at ahead of its September meeting.
Tuesday’s U.S. presidential debate could also prove to be a price driver for crypto markets. Republican nominee Donald Trump has described himself as a pro-crypto candidate for president and recently headlined the biggest bitcoin event of the year in Nashville. Many in the industry see a potential second Trump presidency as a catalyst for the industry, in part due to his pledge to fire Securities and Exchange Commission Chairman Gary Gensler, who has long been seen as a crypto skeptic.
WATCH: How Trump Was 'Crazy'
