Bitcoin experienced a dramatic roller-coaster week, moving from the brink of its all-time high to a significant drop. On Monday, Bitcoin surged close to $70,000 per coin on Coinbase, America's largest crypto exchange. However, by Friday, the cryptocurrency had fallen over 9%, reaching $61,358, with a low of $60,704, according to CoinGecko.
This steep decline was partly driven by a weak U.S. jobs report, which raised concerns about a potential economic recession and triggered a Wall Street sell-off. The report's implications, combined with escalating tensions in the Middle East and a decreased probability of Donald Trump winning the upcoming election, led traders to offload their crypto assets. David Lawant, head of research at FalconX, attributed the sell-off to these combined factors.
The market turbulence followed a relatively optimistic update from the Federal Reserve on Wednesday. Chair Jerome Powell hinted that a long-awaited cut to historically high interest rates might be on the horizon by September. Despite this positive outlook, Bitcoin’s price suffered, reflecting broader market volatility.
In addition to Bitcoin’s woes, Ethereum also faced a challenging week. The second-largest cryptocurrency by market cap fell by 8% over the week, ending the weekend at $2,963. Similarly, Solana experienced a tough stretch, dropping over 7% to $151. Overall, nearly all of the top 100 cryptocurrencies by market cap reported declines.
The hardest-hit were the riskiest assets, particularly meme coins and tokens. Dogwifhat, the largest meme token on the Solana network, plummeted more than 35% to $1.68. Bonk also saw a significant drop of 22%.
Despite the market downturn, crypto policy discussions remained lively. Senator Cynthia Lummis (R-WY) introduced a bill to establish a national Bitcoin reserve, and former President Donald Trump proposed using Bitcoin to tackle the U.S.'s $35 trillion debt. However, specifics on how Trump’s plan would be implemented remain unclear, leaving many questions about the feasibility of such a strategy.
Amidst the chaos, there was a silver lining for Bitcoin miners. The network’s mining difficulty hit a new all-time high, indicating that the Bitcoin network is stronger than ever despite the price fluctuations.
August 2024, Cryptoniteuae