Crypto Stocks Suffer Major Losses: Broadcom and Coinbase Lead the Decline

Crypto Stocks Turmoil: Bitcoin and Ether Plunge Amid Economic Uncertainty

Crypto Stocks – This week, Bitcoin, Ether, and crypto-related stocks endured significant sell-offs as investors grappled with growing concerns about the U.S. economy. Coinbase had its worst week of the year, while Bitcoin miner Marathon Digital saw a steep 20% drop. September historically proves challenging for crypto assets, and this year has been no exception. Schwab’s basket of crypto-related equities hit its lowest level since February, highlighting the broad market downturn.

Nasdaq Faces Worst Week Since January 2022

The broader market decline was reflected in the tech-heavy Nasdaq Composite (^IXIC), which slid 5.8% for the week, marking its worst performance since January 2022. The broader concern about economic health contributed to this downturn, with Bitcoin, Ether, and other risky assets experiencing substantial declines.

Jobs Data Misses Expectations, Adding to Market Anxiety

The catalyst for this week’s market turmoil was a mixed jobs report for August. The U.S. economy added 142,000 jobs, falling short of the anticipated 165,000. The previous month’s job growth was also revised downward, reflecting a cooling labor market. Despite the disappointing job numbers, the unemployment rate ticked down to 4.2%, providing a modest positive signal amid the broader economic concerns.

Crypto Market’s Seasonal Weakness and Fear Sentiment

September has historically been a tough month for crypto assets. According to CoinGlass, Bitcoin typically sees an average loss of 4.8% in September. Currently, the Crypto Fear & Greed Index is firmly in the “Extreme Fear” zone, indicating heightened investor anxiety about price movements.

Bitcoin and Ether See Significant Drops

Bitcoin slipped to its lowest level since February, falling 4% over the last 24 hours to approximately $54,000. The sell-off was exacerbated by weak manufacturing data, which stoked fears of an economic slowdown. In a short week due to the Labor Day holiday, the 11 U.S. spot Bitcoin exchange-traded funds (ETFs) experienced their worst day in over four months, with over $287 million withdrawn from these funds.

Federal Reserve’s Potential Rate Cuts and Market Impact

The Federal Reserve is closely monitored as it approaches its meeting on September 17-18. Fed Chair Jerome Powell suggested last month that it may be time to adjust interest rates. Analysts predict either a 0.25% or 0.5% reduction from the current rate of 5.25%-5.5%. Looser monetary policy typically benefits risky assets like crypto, which often see increased investor inflows when borrowing costs decrease.

Impact of Upcoming Inflation Data and Political Events

The Consumer Price Index (CPI) for August, due Wednesday, is another critical metric the Fed will consider before its September meeting. Additionally, the U.S. presidential debate on Tuesday could impact crypto markets. Republican nominee Donald Trump has positioned himself as a pro-crypto candidate and recently headlined a major Bitcoin event in Nashville. A potential second Trump presidency might be seen as favorable for the crypto industry, especially given his promise to remove SEC Chair Gary Gensler, who is perceived as a crypto skeptic.

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