Bitcoin Price Drops Under $57K as Nvidia and S&P 500 See Decline

Crypto Reporter

Shalini Nagarajan

Crypto Reporter

Shalini Nagarajan

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Shalini is a crypto reporter who provides in-depth reports on daily developments and regulatory shifts in the cryptocurrency sector.

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Last updated:

September 4, 2024 02:40 EDT

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Bitcoin fell 4.7% on Wednesday, dropping below $57,000, triggered by economic uncertainty in the US and a sell-off in tech stocks led by Nvidia. The crypto asset last traded around $56,416 as of 0640 UTC.

On Tuesday, the US Manufacturing PMI for Aug. 2024 came in at 47.2, slightly lower than the anticipated 47.5. Still, it showed a slight recovery from July’s 46.8. However, this PMI reading, signalling a contraction in the manufacturing sector, fueled a wider market sell-off, thereby impacting Bitcoin’s price.

Following the release of the PMI data, the S&P 500 dropped 2.12%. Consequently, the Dow Jones Industrial Average also fell 1.51%. Similarly, the Nasdaq Composite saw a more significant drop of 3.26%.

The Manufacturing PMI is a crucial indicator of economic health. As a result, shifts in investor sentiment triggered by these metrics often lead to negative impacts on Bitcoin, which is seen as a high-risk asset. Merely a week ago, Bitcoin’s price was hovering around the mid-$60,000 range.

Nvidia Stock Plummets 9.5% After DOJ Subpoena Sparks Antitrust Concerns

Additionally, the market’s decline was further fueled by news that the US Department of Justice had subpoenaed Nvidia, intensifying its antitrust investigation.

This subpoena resulted from concerns that Nvidia may be violating antitrust laws. Specifically, there are claims that Nvidia penalized customers for not exclusively using its AI chips. These actions are seen as potentially limiting competition in the AI hardware market.

Consequently, Nvidia’s stock plummeted by about 9.5%, resulting in a staggering $278.9b loss in market value. This decline marked the most significant single-day value loss for a US stock.

Nvidia Stock Slump Hints at Broader Tech Worries, Bitcoin Faces Impact

Nvidia, a top GPU manufacturer, is often viewed as a bellwether for the tech and AI sectors. Additionally, due to the use of GPUs in cryptocurrency mining, its stock price indirectly reflects trends in the crypto market.

A drop in Nvidia’s stock price could signal broader worries in the tech industry or concerns about an economic slowdown. As a result, investors may pull back from risky assets such as Bitcoin.