Crypto Market Crashes as Bond Yields Soar and Investors Take Profits
The crypto market is experiencing a downturn today, with Bitcoin and most altcoins trading in the red. After reaching an all-time high of $87,000 earlier this week, Bitcoin has plummeted to $83,830, while Ethereum fell to $2,670.
The main reason behind the crash is the rising bond yields in the United States and other countries. The 10-year yield has jumped to 5.1%, with the 2-year yield reaching 4.90% and the 30-year yield surging to 5.4%. This increase is driven by the rising crude oil price, which has led to higher gasoline and diesel prices.
The Federal Reserve's decision to continue hiking rates is expected to further exacerbate the situation. Bitcoin and other altcoins typically underperform when interest rates are on an uptrend. A notable example of this is the 2022 market crash, where Bitcoin dropped to $16,000 amidst rate hikes and the collapse of companies like FTX and Terra.
Additionally, investors are taking profits after the recent surge in cryptocurrency prices. Many top altcoins that were up by double digits from their August lows have seen significant declines today. Arbitrum and Uniswap, which rose 263% and 240%, respectively, have dropped by over 11% in the last 24 hours.