Bitcoin drops below $98,000 on Tuesday as rising U.S. Treasury yields created turbulence for risk assets. The flagship cryptocurrency slipped by 4.8%, retreating to $97,183.80, according to Coin Metrics. More importantly, the CoinDesk 20 index shed over 5%.
U.S. Treasury Yields Impact Bitcoin and Crypto Stocks
The decline coincided with a jump in the 10-year U.S. Treasury yield, following strong growth data from the Institute for Supply Management. Their report showed unexpected expansion in the U.S. services sector for December, fueling concerns about persistent inflation. Rising yields often pressure growth-oriented assets like cryptocurrencies, affecting their valuations downwards.
Cryptocurrency stocks were also affected. The price of Coinbase plummeted over 7%, while that of MicroStrategy dropped over 9%. Other major bitcoin mining companies like Mara Holdings and Core Scientific had a decline of around 5%.
Bitcoin Drops Below $98,000 Mark: Latest Trend and Coming Days
Bitcoin had traded above $102,000 on Monday and is up more than 3% since the start of 2025. The cryptocurrency also posted an impressive 120% gain for 2024, as investor optimism grew around the possibility of clearer regulatory frameworks boosting digital asset adoption.
However, the way forward is unclear. The Federal Reserve has not been too encouraging about cutting interest rates for 2025. Last December, it cut rates for the third time but indicated that it would have fewer rate cuts than investors were expecting this year. Traditionally, rate hikes have been against Bitcoin’s upward momentum, while rate cuts are in favor of its upward momentum.
Although the price of Bitcoin dropped on Tuesday, analysts say it may well double by year’s end. For many investors, hope springs that progress in regulation and adoption may provide a huge tailwind for cryptocurrencies and their related stocks such as Coinbase and Robinhood.
Also, see: Elon Musk fears global population decline: India, Pakistan, and Indonesia among major victims
1 Comment