Bitcoin and Ether experienced significant price drops, with Bitcoin falling below $50,000.
Major crypto-related stocks like Coinbase and MicroStrategy suffered substantial losses.

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Crypto prices and stocks related to crypto plummeted on Monday as global markets reacted to disappointing US economic data and escalating tensions in the Middle East. The downturn affected major cryptocurrencies, mining companies, and crypto-focused businesses.

Bitcoin, the largest crypto by market capitalization, experienced a sharp decline of up to 15%, briefly falling below $50,000 for the first time since February before recovering to around $51,000. Ether, the second-largest cryptocurrency, continued its downward trend for the seventh consecutive day, marking its most significant drop since at least May 2021.

Global market downturn

The broader crypto market saw a substantial decrease of nearly 20%, settling at a 17% loss by 6 AM EDT, according to data from CoinGecko, rounding off to $1.8 trillion. This downturn coincided with falling equity markets in Asia and Europe, reflecting a global shift in investor sentiment.

Crypto mining companies were among the hardest hit in the stock market. Marathon Digital and Iren both saw declines of almost 14%, while Hut 8 and Riot Platforms experienced losses of 12% and 11%, respectively. These steep drops in mining stocks closely mirrored the fall in Bitcoin’s price.

Economic data impact, geopolitical tensions

The market turmoil comes in the wake of disappointing US economic data. The Labor Department’s recent jobs report revealed lower-than-expected figures and a higher unemployment rate than forecast, raising concerns about the strength of the world’s largest economy. This follows rising geopolitical tensions have intensified following Iran’s threats to attack Israel in response to the assassination of Ismail Haniyeh, the political chief of Hamas, in Tehran last week.

Late hours Sunday, Bitcoin’s value dipped to $53,000 with Ether falling sharply due to a panic triggered by the Bank of Japan’s interest rate hike. Bitcoin recently went as low as $49K, though it has recovered a bit to the $51K level at the time of writing, despite broad selloffs triggering over $1 billion in liquidations across sectors.

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Economists Contradicts With Executives On US Recession, Bitcoin Nears $60K

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August 14, 2024

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Economists Contradicts With Executives On US Recession, Bitcoin Nears $60K

Popular economists believe the United States could already be in recession, contrary to the belief of many CEOs and business leaders that a recession is not coming. Notably, Wall Street giant JPMorgan’s prediction of an increase in the US recession prospects by the end of the year spurred fears in the market. The upcoming jobs reports will become a key factor for the Fed to decide on monetary policy.

Economists Say the United States May Be In Recession

While the latest initial jobless claims data provided some relief to the stock and crypto market, US recession fears continue to persist. Bitcoin and Ethereum prices witnessed a 7% and 6% jump respectively on August 8, but concerns are increasing ahead jobs and inflation data.

The initial jobless claims fell more than expected for the week ending August 3. People claiming unemployment benefits in the US fell by 7K to 233K below market expectations of 240K.

Economist David Rosenberg in an interview with Bloomberg said “We are either in a recession or about to confirm one.” He thinks despite the weekly initial jobless claims dropping more than expected, the real concern is the rapidly increasing unemployment rate.

Rosenberg’s claims somewhat resonate with former Federal Reserve economist Claudia Sahm who said that “While the US isn’t yet in a recession, it’s uncomfortably close.”

It is incredible that I continue to read and hear how the rise in the unemployment rate is due to booming immigration. Nary a word that all this has done is act as an antidote to the fact that the native-born U.S. population has dropped -0.3% over the year to July. Total…

— David Rosenberg (@EconguyRosie) August 8, 2024

On the contrary, business leaders in the U.S. say they don’t see any signs of recession and the U.S. economy remains resilient. Roland Busch, CEO of Siemens, said the market is a bit muted ahead of the US election. Also, Disney CFO Hugh Johnston thinks the economy will continue to strengthen, bringing back consumers.

JPMorgan Warns About Peak in Fourth Quarter

Wall Street giant JPMorgan has raised the odds of US recession to 35%, up from 25% as of the start of last month. JPMorgan now sees just a 30% chance of the Federal Reserve and its peers keeping interest rates “high-for-long,” as compared with the earlier 50-50 estimates two months back. JPMorgan predicted that the U.S. Federal Reserve would cut rates by half a percentage point in September and November.

CME FedWatch tool now shows less than 50% chance of a 50 bps rate cut in September after recent market sentiment ahead of US CPI. Currently, the Bank of Japan has pushed back its plans for any rate hike due to market instability, renewing cautious buying in the market. However, it’s still unsure if the central bank will increase interest rate rates next year.

BTC price surpassed $59,500 to an intraday high of $59,726, but now it has dropped back to $58,500. The trading volume is low, indicating that the buying activity is low. Notably, while retail investors were selling their holdings during the crash last week, institutional investors bought the dip.

Also Read: Bitcoin Sees Strong US Buying Pressure Amid US Recession Fears

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