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Bitcoin fell on Tuesday as a spike in Treasury yields weighed on risk assets in general.
The flagship cryptocurrency was last traded down 5% at $97,008.96, according to Coin Metrics. The broader cryptocurrency market as measured CoinDesk 20 the index fell by more than 6%.
Crypto shares Coinbase and Micro strategy decreased by more than 7% and 9%, respectively. Bitcoin miner Mara Holdings Company and Basic scientific decreased by about 5% each.
Bitcoin drops below $98,000
The moves followed a sudden increase The yield on the 10-year US Treasury after data released by the Institute of Supply Management reflecting faster than expected growth in the US services sector in December, raising concerns about rising inflation. Rising yields tend to put pressure on risky, growth-oriented assets.
Bitcoin traded above $102,000 on Monday and is expected to double that level this year. Investors hope that tighter regulation will support digital asset prices and in turn benefit stocks like Coinbase and Coinbase Robinhood.
However, uncertainty about the Federal Reserve’s interest rate cut path could put crypto prices on the path. The central bank signaled in December that while it was cutting rates for the third time, it may cut rates by less in 2025 than investors expected. Historically, rate cuts have had a positive effect on the price of Bitcoin, while rate increases have had a negative effect.
Bitcoin is up more than 3% since the beginning of the year. In 2024, it increased by 120%.
