Coinbase, Marathon Digital and Riot Platforms lead decline in crypto stocks

Cryptocurrency exchange Coinbase has just had its worst week of the 12 months. Bitcoin miners Marathon Digital fell 20%. A basket of crypto-related stocks tracked by Schwab fell to its lowest level since February.

The industry-wide sell-off reflected growing concerns in regards to the health of the U.S. economy and followed a general decline in prices for Bitcoin, ether and dangerous assets on the whole. The tech-heavy Nasdaq lost 5.8% for the week, its worst performance since January 2022.

In addition to the macro pressure, the calendar is doing crypto no favors. According to Coin jarSeptember is historically a difficult trading month for crypto assets, with Bitcoin recording a mean lack of 4.8%. Crypto Fear and Greed Indexa sentiment barometer for the crypto market, is firmly within the “Extreme Fear” zone, indicating that investors are concerned about price movements.

The Bitcoin price fell by 4 percent within the last 24 hours to around 54,000 US dollars, the bottom level since February.

In per week shortened by Labor Day, the general market saw the most important sell-off on Tuesday after weak manufacturing data stoked fears of an economic slowdown. The 11 U.S. spot bitcoin ETFs had their worst day in over 4 months following the report, with a complete of greater than $287 million withdrawn from the ETFs.

Data continued to be poor through the tip of the week. On Friday, the Bureau of Labor Statistics reported a slowdown within the labor market, and August payrolls fell in need of expectations.

“The recent U.S. jobs results were a moment of truth for risky assets like Bitcoin, as the labor market is seen as the key sector that could influence the Fed's decision to cut rates this month,” Leena ElDeeb, research analyst at ETF issuer 21Shares, said in an email.

The total cryptocurrency market capitalization has fallen by almost 30% from its 2024 peak of $2.67 trillion and now stands at $1.9 trillion. Altcoins like Solana SOL Sign, XRP and Cardano's ADA all have fallen greater than 8% prior to now week. Ether, the world's second-largest cryptocurrency, plunged 12% to around $2,200.

While it was a rough week for dangerous assets of every kind, investors who’re overinvested in crypto stocks were hit particularly hard.

Schwab Asset Management's crypto ETF (STCE), which incorporates MicroStrategy, Marathon Digital, Riot Blockchain and Coinbase, fell 11%.

Coinbase, which is embroiled in a legal battle with the SEC over whether the exchange made unregistered securities sales, plunged 20 percent to its lowest level since February. MicroStrategy, the bitcoin aggregator company founded by Michael Saylor, lost 14 percent for the week, following a 12 percent plunge the week before.

The leading Bitcoin mining firms all ended the week with double-digit declines, led by CleanSparkA drop of 24%. Riot Platforms 17% lost.

The downward trend is a continuation of last month. JPMorgan Chase Analysts said in a note on Friday, citing estimates from TradingView, that despite dramatic drops in token and asset prices, trading increased in August, with average every day volume up 8% from the previous month.

As investors deal with the longer term, their attention is primarily focused on the Federal Reserve.

The central bank could cut its key rate of interest for the primary time in 4 years at its meeting on September 17 and 18. Fed Chairman Jerome Powell said last month that it was “time” to regulate rate of interest policy. Analysts expect a discount of 0.25 or 0.5 percent from the present rate of interest of 5.25 to five.5 percent.

Looser monetary policy is usually a superb thing for dangerous assets like cryptocurrencies, as they have an inclination to see more investor money as borrowing costs fall.

The latest inflation data will probably be released on Wednesday with the buyer price index for August. The index is one other key indicator that the Fed will consider ahead of its September meeting.

The US presidential debate on Tuesday could also prove to be a price driver in crypto markets. Republican presidential candidate Donald Trump has branded himself as a pro-crypto presidential candidate and recently headlined the most important Bitcoin event of the 12 months in Nashville. Many within the industry see a possible second Trump presidency as a catalyst for the industry, partly because he has vowed to oust SEC Chairman Gary Gensler, who has long been considered a crypto skeptic.

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