Coinbase has worst week of the year as crypto stocks plummet

Market Overview - The cryptocurrency market experienced a significant selloff, with the total market cap down close to 30% from its 2024 peak of $2.67 trillion, now at$1.9 trillion [7] - Bitcoin fell to its lowest level since February, dropping 4% in the last 24 hours to around $54,000 [3] - Ether, the second-largest cryptocurrency, plunged 12$2,200 [7] - Altcoins like Solana's SOL token, XRP, and Cardano's ADA all dropped more than 8% in the past week [7] Crypto Equities Performance - Crypto-related equities tracked by Schwab fell to their lowest level since February [1] - Schwab Asset Management's crypto-themed ETF (STCE), which includes MicroStrategy, Marathon Digital, Riot Blockchain, and Coinbase, fell 11% [8] - Coinbase plummeted 20% to its lowest since February, while MicroStrategy dropped 14% for the week [9] - Top bitcoin mining companies, including CleanSpark and Riot Platforms, ended the week with double-digit declines of 24% and 17%, respectively [10] Macroeconomic Factors - The tech-heavy Nasdaq slid 5.8% for the week, its worst performance since January 2022, reflecting broader economic concerns [2] - Weak manufacturing data and a cooldown in the labor market, with August payrolls falling short of expectations, contributed to the selloff [4][5] - The Crypto Fear & Greed Index is firmly in the "Extreme Fear" zone, indicating investor anxiety [3] Regulatory and Political Influences - Coinbase is engaged in a court battle with the SEC over allegations of unregistered securities sales [9] - The U.S. presidential debate and the potential for a second Trump presidency are seen as potential catalysts for the crypto industry, given Trump's pro-crypto stance and his vow to remove SEC Chair Gary Gensler [13] Trading Activity - Despite the price drops, trading activity increased in August, with total average daily volumes up 8% from the previous month [10] Federal Reserve and Monetary Policy - The Federal Reserve is expected to cut its benchmark rate for the first time in four years during its September meeting, with analysts anticipating a reduction of either 0.25% or 0.5% from the current rate of 5.25%-5.5% [11] - Looser monetary policy is typically favorable for risky assets like crypto, as lower borrowing costs tend to attract more investor inflows [11] - The August Consumer Price Index, to be released on Wednesday, is another key metric the Fed will consider ahead of its September meeting [12]