Cryptocurrencies and crypto-linked stocks sold off on Thursday after the U.S. government revised second-quarter GDP growth sharply higher, boosting yields and lowering expectations for a Federal Reserve rate cut.
GDP expanded at 3.8% annualized, up from the previous estimate of 3.3% 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 CME FedWatch shows traders now assign a 17% chance the Fed will hold rates next month, up from 8% a day earlier.
Crypto Market Impact
Bitcoin (BTC) dropped below $111,000, its lowest since early September, before rebounding 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 declines. ETH, which had outperformed BTC for months, has now returned to roughly flat YTD versus a 20% gain four weeks ago. Solana, a recent favorite amid corporate adoption and digital asset treasury hype, fell 6% over 24 hours and nearly 20% over the week.
Crypto Stocks Retreat
Crypto-related stocks also declined sharply. MicroStrategy (MSTR) fell 4.5%, Coinbase (COIN) dropped 4.1%, and miners were hit harder: Cipher Mining (CIFR) lost 9.4% despite early gains on its Google AI hosting deal, while HIVE Digital (HIVE), Bitdeer (BTDR), and Bitfarms (BITF) declined 6%-8%. Stablecoin issuer Circle (CRCL) retreated 4.4%, and Galaxy Digital (GLXY) slid 3.7%, extending weakness across the sector.
