The cryptocurrency market just faced a major setback, with some of its biggest players experiencing sharp declines. Coinbase ended its worst week of the year, Bitcoin miner Marathon Digital dropped 20%, and crypto-related equities tracked by Schwab plunged to their lowest levels since February. This selloff reflects growing concerns over the U.S. economy and a broader slump in risky assets, including Bitcoin and Ether.
Adding to the pressure, September has historically been a tough month for crypto, with Bitcoin seeing an average loss of 4.8%, according to CoinGlass. Investor sentiment, measured by the Crypto Fear & Greed Index, shows extreme fear, signaling growing anxiety over the market’s future. In just 24 hours, Bitcoin dropped 4% to around $54,000, its lowest since February, while Ether tumbled 12% to roughly $2,200.
The broader cryptocurrency market has seen a 30% drop in total market cap since its 2024 peak, falling from $2.67 trillion to $1.9 trillion. Altcoins like Solana’s SOL, XRP, and Cardano’s ADA all took significant hits, each dropping over 8% in the last week.
Crypto stocks, too, were hit hard, with Schwab’s crypto-focused ETF falling 11%. Companies like Coinbase, MicroStrategy, and top Bitcoin miners faced double-digit losses. Coinbase, grappling with a legal battle with the SEC, plummeted 20%, while Bitcoin mining company CleanSpark saw a 24% drop.
Despite the rough week, trading activity in crypto picked up. JPMorgan Chase analysts noted an 8% increase in average daily trading volumes in August compared to July, even as token prices fell. Now, all eyes are on the Federal Reserve, which could cut interest rates for the first time in four years when it meets on September 17-18. Looser monetary policy is typically seen as a positive for crypto, as lower borrowing costs tend to attract more investor inflows.
Investors will also be watching for key inflation data on Wednesday and the upcoming U.S. presidential debate. Donald Trump, who has positioned himself as a pro-crypto candidate, could influence the markets, especially given his stance on removing SEC Chair Gary Gensler, a known crypto skeptic.
As the market navigates through economic uncertainty and potential political shifts, the future of cryptocurrency remains in a delicate balance, with the next few weeks potentially shaping its trajectory.
