As crypto stocks plummet, Coinbase experiences its worst week of the year.

• The U.S. economy's health caused a sharp selloff of Bitcoin, ether, and crypto-related stocks this week.
• Bitcoin miner Marathon Digital experienced a 20% decline, marking Coinbase's worst week of the year.
• September is historically a difficult trading month for crypto assets.

The cryptocurrency exchange had its worst week of the year, with Bitcoin miner falling 20%. A basket of crypto-related equities tracked by fell to its lowest level since February.

The decline in the Nasdaq's performance, which slid 5.8% for the week, reflected growing concerns about the health of the U.S. economy and tracked a broader decline in prices of tech-heavy assets.

The calendar is negatively impacting crypto trading, as September has historically been a challenging month for crypto assets, with bitcoin experiencing an average loss of 4.8%. Additionally, the Crypto Fear & Greed Index is in the "Extreme Fear" zone, indicating that investors are concerned about price fluctuations.

The price of Bitcoin dropped to its lowest point since February, decreasing by 4% in the past day to approximately $54,000.

The worst day in over four months for the 11 U.S. spot bitcoin exchange-traded funds occurred on Tuesday, following a report that stoked fears of an economic slowdown. The selloff in the broader market was the steepest on that day.

On Friday, the Bureau of Labor Statistics reported a cooldown in the labor market with August payrolls falling short of expectations, which was bad news as the data was bad through the end of the week.

According to Leena ElDeeb, a research analyst with ETF issuer 21Shares, the recent U.S. labor market results served as a turning point for risk-on assets like bitcoin, as the labor market is widely viewed as the key sector that may impact the Fed's decision to lower interest rates this month.

The total market cap of crypto has decreased by approximately 30% from its 2024 high of $2.67 trillion to its current value of $1.9 trillion. Several altcoins, including Solana's token and Cardano's token, have dropped more than 8% in the past week. Additionally, Ether, the world's second-largest cryptocurrency, has fallen 12% to around $2,200.

Crypto equities hit hardest

Crypto stocks experienced a particularly bad week for investors, despite it being a challenging time for risky assets across the board.

The crypto-themed ETF (STCE) managed by Schwab Asset Management, consisting of MicroStrategy, Marathon Digital, Riot Blockchain, and Coinbase, experienced a 11% decline.

Coinbase, embroiled in a legal dispute with the SEC over unregistered sales of securities, experienced a 20% decline to its lowest point since February. Meanwhile, MicroStrategy, the bitcoin investment company founded by Michael Saylor, saw a 14% drop in value this week, following a 12% decline the previous week.

The top bitcoin mining companies experienced double-digit declines at the end of the week, with 's 24% drop being the largest. Additionally, lost 17%.

Despite a downward slide in token and asset prices, trading increased in August, with total average daily volumes up 8% from the previous month, according to analysts' estimates.

The Federal Reserve is a major area of focus for investors as they look to the future.

The central bank may reduce its benchmark for the first time in four years during its meeting on Sept. 17-18. Fed Chair Jerome Powell stated last month that "the time has come" for interest-rate policy adjustments. Analysts predict that the reduction will be either 0.25% or 0.5% from the current rate of 5.25%-5.5%.

When borrowing costs decrease, risky assets like crypto tend to attract more investor inflows due to a looser monetary policy.

The Consumer Price Index for August, which provides the latest read on inflation, will be released on Wednesday. This data will be another important factor the Fed will take into account before its September meeting.

The U.S. presidential debate on Tuesday could potentially influence the crypto markets. Donald Trump, the Republican nominee, has positioned himself as a pro-crypto candidate and recently headlined the largest bitcoin event of the year in Nashville. Many in the industry believe that a second Trump presidency could be a catalyst for the industry, as he has pledged to remove SEC Chair Gary Gensler, who is known for being a crypto critic.

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