Bitcoin Falls Below $98,000 as Treasury Yields Pressure Risk Assets

bitcoin plunged on Tuesday as a rise in Treasury yields weighed on risk assets overall.

The price of the flagship cryptocurrency fell 4.8% to $97,183.80, according to Coin Metrics. The broader cryptocurrency market, measured by the CoinDesk 20 index, fell more than 5%.

Crypto Stocks Coinbase and Microstrategy they fell more than 7% and 9%, respectively. bitcoin miners Mara Holdings and Scientific core They were down approximately 5% each.

The movements followed a sudden increase in the 10-Year US Treasury Yield according to data published by the Institute for Supply Management reflected faster than expected growth in the US services sector in December, adding to concerns about stiffer inflation. Rising yields tend to put pressure on growth-oriented risk assets.

Bitcoin traded above $102,000 on Monday and is expected to roughly double from that level this year. Investors are hopeful that clearer regulation will support digital asset prices and, in turn, benefit stocks like Coinbase and Robinhood.

However, uncertainty over the path of the Federal Reserve’s interest rate cuts could put obstacles in the way for cryptocurrency prices. In December, the central bank signaled that although it was cutting rates for the third time, it could make fewer cuts in 2025 than investors had anticipated. Historically, rate cuts have had a positive effect on the price of bitcoin, while hikes have had a negative impact.

Bitcoin is up more than 3% since the beginning of the year. Posted a 120% gain by 2024.