Cryptocurrency-Exposed Stocks Drop in Premarket Trading

Shares in cryptocurrency-exposed stocks fell in premarket U.S. trading on Wednesday, following a decline in Bitcoin prices, which hit a one-month low.

By 06:54 EST (10:54 GMT), the digital coin exchange platform Coinbase (NASDAQ:COIN) had decreased by 0.4%. Meanwhile, crypto miner Cipher Mining (NASDAQ:CIFR) dipped by 2.2%, while peers CleanSpark (NASDAQ:CLSK), Marathon Digital (NASDAQ:MARA), and Riot Platforms (NASDAQ:RIOT) saw declines of 2.2%, 1.7%, and 1.0%, respectively.

The bleak sentiment was fueled by weaker-than-expected results from the Institute for Supply Management’s monthly measure of U.S. manufacturing activity, raising concerns about a potential economic slowdown.

This backdrop contributed to the steepest selloff in a month on Wall Street following Labor Day, with Bitcoin decreasing by over 4% at one point on Wednesday, before recovering some ground. Additionally, the cryptocurrency market experienced losses, with Solana, Cardano, and Dogecoin also declining.

The global crypto market cap fell below $2 trillion, down nearly 3.6% in the last 24 hours, according to CoinMarketCap.

Looking ahead, the anticipated release of the August nonfarm payrolls report on Friday could influence Federal Reserve Chair Jerome Powell’s shift in focus from tackling inflation to addressing potential job market risks. Powell recently indicated the necessity to modify monetary policy due to these risks.

Lower interest rates could favor cryptocurrencies by enhancing liquidity for speculative trading. According to the CME’s FedWatch Tool, analysts expect the Fed to implement a 25-basis point reduction in borrowing costs during its upcoming two-day meeting on September 17-18, as current rates stand at a 23-year peak of 5.25% to 5.5%.