Bitcoin, Ether fall as 2-year bond nears 15-year high

by James · February 21, 2023

Bitcoin and Ether fell in trading on Wednesday morning in Asia along with all other top 10 non-stablecoin cryptocurrencies by market cap. Polygon saw the biggest drop, while BNB fell the least. A series of US economic data released on Tuesday, including earnings reports from retail giants and the rising interest rate on some Treasury bills, weighed on stock markets.

See related article: Bitcoin Exceeds 154,000 Inscriptions Within One Month As Litecoin Ordinals Launch

Fast facts

Bitcoin fell 1.6% over the past 24 hours to trade at $24,442 as of 8 a.m. in Hong Kong, though it was still up 10% over the past week, according to CoinMarketCap. Ethereum fell 2.6% to $1,658, gaining 6.5% in the past seven days.
Polygon lost 6.1% to $1.39, although it has still recorded 10% gains over the past seven days. BNB fell 1.2% to USD 311.48, but was still up 5.2% for the week.
Total crypto market capitalization fell 1.8% to $1.11 trillion at 8 a.m. in Hong Kong. The total trading volume in the last 24 hours has increased by 3.3% to USD 66.70 billion.
US stocks closed lower on Tuesday, which was the first trading day of the week, as markets closed on Monday for President’s Day. The Dow Jones Industrial Average fell 2.1%, the S&P 500 fell 2% and the Nasdaq Composite Index ended the day down 2.5%.
The three key indexes posted their biggest one-day losses since Dec. 15, as the S&P 500 halved its gains so far this year, while the Dow Jones wiped out nearly all of its gains in 2023.
The two-year Treasury yield rose to 4.7% on Tuesday, the highest level since 2007, while the 10-year Treasury yield rose to 3.9%. High levels of government bond yields represent a greater upside risk for returns, and put downward pressure on shares.
The US Federal Reserve will release the minutes of its January 31-February 1 policy meeting, which investors will look to for hints on how the central bank can act to tackle inflation.
Retail giants Walmart Inc. and Home Depot Inc. released their holiday earnings reports on Tuesday. Walmart’s revenue rose 7.3% to $164 billion from a year earlier, while Home Depot fell short of expectations, reporting $35 billion in fourth-quarter revenue. Both companies forecast a challenging quarter ahead due to headwinds from supply chain shortages and ongoing inflation in the economy.
Economic data released on Tuesday suggested that business activity in the United States is increasing. The S&P Global Services Purchasing Managers’ Index (PMI) rose to an 8-month high of 50.5 in February, up from 46.8 the previous month, while the manufacturing PMI rose to a four-month high of 47.8 from 46, 9.
The Fed raised interest rates to a range of 4.5%-4.75% on February 1 to combat inflation, the highest level since October 2007, with the latest data for the consumer price index up 6.4% in January from a year ago, down from 6 .5% in December and 7.1% in November.
Analysts at CME Group predict about a 75% chance the Fed will raise interest rates by another 25 basis points next month.