Cryptocurrency markets experienced significant declines on Thursday, with bitcoin (BTC) falling below $111,000 and crypto-related stocks plunging following unexpectedly strong U.S. economic data.
The U.S. Bureau of Economic Analysis revised second-quarter GDP growth upward to 3.8% annually, substantially higher than previous estimates of 3.3% and the initial 3% reading.
Concurrently, initial jobless claims dropped to 218,000 from the previous week's 232,000, significantly below economist forecasts of 235,000, challenging assumptions about labor market weakness.
This robust economic performance diminished expectations for Federal Reserve interest rate cuts next month. According to CME FedWatch, traders now price only a 17% probability of unchanged rates, up from 8% just one day earlier.
The 10-year U.S. Treasury yield jumped to nearly 4.20% following the reports, reaching its highest level in three weeks. This bond market movement contributed to stock market declines, with the Nasdaq Composite initially falling more than 1% before recovering to a 0.5% loss.
Bitcoin (BTC) declined to $111,000, its lowest level since early September, before rebounding to $111,500, representing a 1.6% 24-hour decrease. Ethereum (ETH) dropped below $4,000 with a 4.5% decline, while Solana (SOL), Dogecoin (DOGE), Avalanche (AVAX), and Sui (SUI) experienced even steeper losses ranging from 6-20%.
After significantly outperforming bitcoin for several months, Ethereum has surrendered substantial gains, with the ETH/BTC ratio returning to flat year-to-date compared to being up 20% just four weeks ago.
Solana (SOL), recently favored due to corporate treasury adoption and institutional interest, declined 6% over 24 hours and nearly 20% over the past week.
Crypto Stock Sell-Off
Crypto-related equities fell sharply across the board. MicroStrategy (MSTR), the largest corporate bitcoin holder, dropped 4.5%, while Coinbase (COIN) declined 4.1%. Mining stocks suffered more severe losses: Cipher Mining (CIFR) fell 9.4% despite early gains from a Google AI partnership, with HIVE Digital (HIVE), Bitdeer (BTDR), and Bitfarms (BITF) plunging 6-8%.
Stablecoin issuer Circle (CRCL) retreated 4.4% and Galaxy Digital (GLXY) slid 3.7%, extending the sector-wide weakness.