The surge in US Treasury yields hits risk assets, impacting the cryptocurrency market.

On Tuesday, the price of Bitcoin fell significantly, as the surge in US Treasury bond yields put pressure on overall risk assets. According to Coin Metrics data, the price of Bitcoin fell by 5% to $96,525.50. Ethereum fell by 8%, while the broader cryptocurrency market (measured by the CoinDesk 20 Index) fell by 7%. Cryptocurrency-related stocks were also impacted. Coinbase and MicroStrategy stocks fell by over 8% and 9%, respectively, while Bitcoin mining companies Mara Holdings and Core Scientific saw their stocks fall by around 7% and 6%. The catalyst for this market volatility was data released by the Institute for Supply Management (ISM), showing that the growth rate of the US service sector in December exceeded expectations, exacerbating market concerns about "sticky inflation". The 10-year US Treasury bond yield quickly rose as a result, and rising yields usually put pressure on growth-oriented risk assets. On Monday, the price of Bitcoin had surpassed the $102,000 level. The market generally expected Bitcoin to double from this level this year. Investors hoped that a clearer regulatory framework would support the prices of digital assets, benefiting related stocks like Coinbase and Robinhood. However, the uncertainty over the Federal Reserve's future interest rate path may bring volatility risk to cryptocurrency prices. Last December, although the Fed cut interest rates for the third time in a row, they also hinted that the number of rate cuts in 2025 might be fewer than expected by the market. Historical data shows that rate cuts usually have a positive impact on Bitcoin prices, while rate hikes have the opposite effect. Nevertheless, Bitcoin has risen by over 3% since the beginning of this year, and recorded a 120% increase for the full year in 2024.