Cryptocurrencies and crypto-related stocks fell sharply on Thursday after the U.S. government revised second-quarter GDP growth higher, lifting Treasury yields and reducing expectations for a Federal Reserve rate cut.
GDP grew at 3.8% annualized, up from 3.3% in the previous estimate and well above the initial 3% reading. Initial jobless claims fell to 218,000, below expectations of 235,000, signaling continued labor market strength. The stronger-than-expected data pushed the 10-year Treasury yield to nearly 4.20%, its highest in three weeks, while traders now see a 17% chance that the Fed will hold rates next month, up from 8% a day earlier, according to CME FedWatch.
Crypto Market Reaction
Bitcoin (BTC) dipped below $111,000, hitting its lowest since early September, before recovering slightly to $111,500, down 1.6% over 24 hours. Ether (ETH) fell below $4,000, down 4.5%, while Solana (SOL), Dogecoin (DOGE), Avalanche (AVAX), and SUI saw even steeper losses. ETH, which had outperformed BTC in recent months, has now returned to roughly flat year-to-date versus a 20% gain four weeks ago. Solana, a recent market favorite amid corporate adoption and digital asset treasury hype, fell 6% in 24 hours and nearly 20% over the past week.
Crypto-Related Stocks Decline
Crypto equities also sold off sharply. MicroStrategy (MSTR) dropped 4.5%, Coinbase (COIN) fell 4.1%, and miners experienced heavier losses: Cipher Mining (CIFR) declined 9.4% despite early gains from its Google AI hosting deal, while HIVE Digital (HIVE), Bitdeer (BTDR), and Bitfarms (BITF) lost 6%-8%. Stablecoin issuer Circle (CRCL) retreated 4.4%, and Galaxy Digital (GLXY) slid 3.7%, extending losses across the sector.
