Cryptocurrencies Tumble Amid Economic Concerns, Bitcoin Down 3.7%

On the first two days of August, cryptocurrencies experienced a notable downturn following a series of economic reports that intensified investor concerns about the economy, prompting a shift away from riskier assets like crypto.

Bitcoin's value dropped by over 3.7%, settling at $63,144.00, as reported by Coin Metrics. Meanwhile, Ether declined by 5%, reaching $3,099.10.

Crypto-related stocks also felt the impact: Coinbase and MicroStrategy saw declines of 5% and 6%, respectively. Marathon Digital plummeted by 7%, and Riot Platforms decreased by 5.5%. The disappointing economic data released on Thursday heightened fears of a potential recession in the U.S. This came a day after the Federal Reserve decided to maintain current interest rates. Notably, July's manufacturing activity decreased by 1.7 percentage points from June, initial unemployment insurance claims exceeded expectations, and layoffs announced last month hit a two-decade high for July.

Bitcoin is anticipated to face volatile trading in August, traditionally a sluggish month for both the cryptocurrency and risk assets in general. The losses on Thursday wiped out most of Bitcoin's 5.04% gain from July.

Since March, Bitcoin has fluctuated between $55,000 and $70,000, after hitting an all-time high above $73,000. Maintaining a position above this peak has proven challenging.

Despite the recent downturn, Bitcoin remains up more than 48% for the year, with many investors optimistic that it will surpass its previous all-time high in the latter half of the year.