Rising Treasury yields as a result of falling bond prices Tuesday knocked tech stocks in the Nasdaq Composite down nearly 2%.
Aside from BTC, Ethereum fell nearly 8%, Ripple dropped by 6%, and Solana slumped by nearly 10% in the 24-hour window.
BTC Price Retraces Jan 6 Bump on New Congress
Going into the work week, Bitcoin’s price picked up steam on Sunday after trading flat over Friday and Saturday around the $98,000 handle as it spiked to over $102,500 on Tuesday morning.
That was most likely a result of the blockchain market’s enthusiasm for the incoming pro-cryptocurrency Republican Congress. US delegates for the 119th Congress took their oaths of office on Monday after convening in Washington, DC, on Jan. 3.
Ripple Labs CEO Brad Garlinghouse, who oversees development for XRP—the third-most capitalized token without stablecoins (behind Bitcoin and Ethereum)—recently hailed the 119th as “the most pro-crypto Congress in history.”
But on Tuesday, market euphoria over the new regime in Washington faded fast as a surge in US Treasury bond yields depressed prices for risk assets broadly. Cryptocurrencies like Bitcoin weren’t the only growth-oriented high-risk/reward assets to fall on Tuesday.
Bitcoin’s Price Slumps on Treasury Yields
The Nasdaq Composite focused heavily on the tech sector, fell by more than 2.5% before the close of Wall Street markets at 4 pm US Eastern Standard Time. By the end of the day, the Nasdaq had lost nearly 2% after recovering some in intraday trading.
The Institute for Supply Management published new data on Tuesday indicating faster growth in December than analysts expected. Consequently, markets lost their nerve for US Treasury bonds on fears of more inflation in the US dollar.
When the dollar weakens, and prices move up in a growing economy, bond coupons and their principal investment due back to the note’s owner on the maturity date lose value. So, markets sell them at a discount, causing bond yields to rise.
Several analysts in retail and institutional finance have posted some exciting predictions for Bitcoin’s price in 2025. The sentiment overall for a continuing rally has been broadly bullish so far in January.
The post Could Plunging Treasury Yields Be Why BTC Price Slumped Tuesday? appeared first on CryptoPotato.
This articles is written by : Fady Askharoun Samy Askharoun
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