The cryptocurrency market faced a significant downturn as Bitcoin dropped to approximately $78,600, marking a nearly 4% decline from its recent peak of $82,000. This movement coincided with a surge in bond yields, which reached levels not seen in over a year.
The 10-year Treasury yield climbed to 4.54%, its highest point since May 2025, driven by inflation data that exceeded expectations. April’s CPI stood at 3.8%, while PPI matched 2022 levels at 6%, fueling concerns that the Federal Reserve might implement rate hikes rather than cuts. According to the CME FedWatch tool, the probability of a rate hike by December has surpassed 44%, a stark contrast to earlier predictions of multiple cuts.
The impact extended beyond Bitcoin, with crypto-related equities taking a hit. Coinbase dropped nearly 6%, Circle fell 7.4%, and Strategy slipped 5.4%. Bitcoin miners like MARA Holdings and Hut 8 each lost around 7%, while Cipher Mining saw a decline of nearly 9%. The broader stock market also suffered, with the Nasdaq 100 opening 1.7% lower and the S&P 500 falling 1.2%.
Gold dipped by 2.5%, but oil prices rose 3%, crossing the $100 per barrel mark, adding to inflationary pressures. Futures traders, who had initially anticipated two or more Fed cuts in 2026, now expect rates to remain elevated through at least the first half of 2027.
Bitcoin remains below its 200-day moving average, caught between the positive regulatory momentum from the Clarity Act’s progress in the Senate and the negative macro headwinds of rising yields and accelerating inflation. The weekend ahead could see further volatility as investors digest these mixed signals.