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Bitcoin it fell on Tuesday as a jump in Treasury yields weighed on risk assets in general.
The price of the leading cryptocurrency was last seen down 4.8% at $97,183.80, according to Coin Metrics. The broader cryptocurrency market, as measured by CoinDesk 20 index, fell more than 5%.
Crypto shares Coinbase and Microstrategy fell more than 7% and 9% respectively. Bitcoin miners Mara Holdings and Core Scientific each fell by about 5%.
Bitcoin drops below $98,000
The moves followed a sharp rise 10-year US Treasury yield following data published by the Institute for Supply Management reflecting faster-than-expected growth in the US services sector in December, adding to concerns about sharper inflation. Rising yields tend to put pressure on risky growth-oriented assets.
Bitcoin traded above $102,000 on Monday and is expected to double this year from that level. Investors hope that clearer regulation will support digital asset prices and in turn benefit stocks like Coinbase and Robinhood.
However, uncertainty around the Federal Reserve’s rate cut path could lead to headwinds for cryptocurrency prices. In December, the central bank signaled that while it is cutting rates for a third time, it may make fewer cuts 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% year-to-date. It recorded a growth of 120% for 2024.
