Crypto Stocks Tumble 5%-13% as Risk-Off Sentiment Rises Ahead of Powell's Jackson Hole Speech

Crypto stocks plummeted on Tuesday as global investors adopted a risk-off stance amid rising uncertainty surrounding Federal Reserve Chair Jerome Powell’s upcoming remarks at the Jackson Hole summit. The sell-off accelerated following a strong rally in the previous week, fueled by speculation around potential interest rate cuts. As traders began to unwind leveraged and speculative positions, crypto equities and related assets were among the hardest hit. Coinbase and eToro both dropped more than 5%, while Galaxy Digital, a major crypto financial services provider, fell by over 10%. The broader market echoed the sentiment, with the Nasdaq Composite declining 1.46% and the S&P 500 sliding 0.59% [1].

The decline was not limited to traditional crypto platforms. Firms in niche areas of the industry also faced sharp losses. Bitmine Immersion, a mining infrastructure company, dropped 9%, while SharpLink Gaming, which integrates crypto tools with online sports, fell 8%. DeFi Development, a decentralized finance player, recorded the largest single-day loss at 13%. Even stablecoin issuer Circle, which had recently benefited from regulatory clarity under the GENIUS Act, lost 4.5%, signaling that no corner of the crypto ecosystem was untouched [2].

The risk-off environment extended beyond equities. Bitcoin retreated nearly 3% to just above $113,000, and Ether fell more than 5% to around $4,100, according to Coin Metrics. This marked a sharp reversal from the previous week, when Bitcoin had reached an all-time intraday high near $125,000. The sharp correction reflected traders’ attempts to reduce exposure to high-beta assets as macroeconomic risks loomed [3].

Tech stocks, long seen as a proxy for risk appetite, were also under pressure. NVIDIA, one of the most influential names in the sector, lost 3.5%, while Advanced Micro Devices and Broadcom fell 5.4% and 3.6%, respectively. Palantir, which had been among the top-performing software stocks in the previous quarter, plummeted more than 9%, becoming the worst performer in the S&P 500 for the day [4].

Traders and analysts attributed the selloff to mounting caution ahead of Powell’s speech at the Jackson Hole symposium. “With Powell speaking at Jackson Hole, we typically see profit-taking ahead of his remarks,” said Satraj Bambra, CEO of Rails, a hybrid crypto exchange. “Any time there’s communication uncertainty from the Fed, you can generally expect some profit-taking as traders de-risk their positions.” The remarks came at a critical time, as investors sought to adjust their portfolios in anticipation of potential policy shifts [5].

The recent volatility highlights the sector’s susceptibility to broader market conditions and macroeconomic signals. While crypto stocks had benefited from a series of positive developments in the previous months—including Coinbase’s inclusion in the S&P 500 and Circle’s IPO—the environment has shifted in August as investors prepare for possible changes in monetary policy. The sell-off underscores the ongoing challenge for crypto-related equities to be perceived as a core part of institutional investment strategies rather than speculative, high-risk assets [6].

Source: [1] Crypto Market Today (https://www.cnbc.com/2025/08/19/crypto-market-today.html)

[2] Crypto Stocks Tumble on Tuesday as Investors Go into Risk-Off Mode (https://www.msn.com/en-us/money/markets/crypto-stocks-tumble-on-tuesday-as-investors-go-into-risk-off-mode/ar-AA1KOThj?ocid=finance-verthp-feeds)

[3] Nasdaq 100 and S&P500: Tech Stocks and Crypto Dive as Traders Exit High-Beta Names (https://www.fxempire.com/forecasts/article/nasdaq-100-and-sp500-tech-stocks-and-crypto-dive-as-traders-exit-high-beta-names-1542508)

[4] Crypto Extends Decline as Investors Shed Riskier Assets (https://www.msn.com/en-us/money/markets/crypto-extends-decline-as-investors-shed-riskier-assets/ar-AA1KORqV?ocid=finance-verthp-feeds)