Crypto Market Tumbles: Bitcoin Falls Below $111K Amid Lower Rate Cut Expectations

Crypto markets and crypto-related stocks fell sharply on Thursday following a major revision to U.S. economic growth, which boosted yields and lowered expectations for an imminent Federal Reserve rate cut.

The U.S. government reported that second-quarter GDP grew 3.8% annualized, up from the prior estimate of 3.3% and well above the initial 3% reading. Initial jobless claims also fell to 218,000, below expectations of 235,000, signaling continued labor market strength.

The data curtailed expectations for Fed rate cuts. Traders now assign a 17% probability that the Fed will keep rates unchanged next month, up from 8% a day earlier, according to CME FedWatch. The 10-year Treasury yield jumped to nearly 4.20%, its highest in three weeks, putting pressure on risk assets and equities.

Crypto Market Moves

Bitcoin (BTC) slipped below $111,000, hitting its lowest level since early September before rebounding to $111,500, down 1.6% over 24 hours. Ether (ETH) dipped below $4,000, down 4.5%, while Solana (SOL), Dogecoin (DOGE), Avalanche (AVAX), and SUI suffered even steeper losses.

ETH, which had outperformed BTC for months, has given back significant gains, with the ETH/BTC ratio now roughly flat year-to-date, versus up 20% four weeks ago. Solana, a recent favorite amid corporate adoption and digital asset treasury hype, dropped 6% in 24 hours and nearly 20% over the past week.

Crypto Stocks Retreat

Crypto-related equities sold off across the board. MicroStrategy (MSTR) fell 4.5%, Coinbase (COIN) dropped 4.1%, and miners saw sharper declines: Cipher Mining (CIFR) fell 9.4% despite early gains on 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.