New news from Reuters on December 27, 2024 shows that the cryptocurrency market is going through a tough period when crypto-related stocks such as MicroStrategy, MARA Holdings and Coinbase Global fell sharply from 1.9% to 4.8%, after the price of Bitcoin fell by 3.9%. This is one of the tough days for investors when the virtual currency market is under constant pressure from the volatility of US government bond yields.
The yield on the benchmark 10-year U.S. Treasury note hit its highest level since May, holding steady at 4.64% in early trading before slipping slightly to 4.58% in the afternoon. Such a rise in yields is typically a negative for growth stocks, especially large technology stocks.
The pressure in the markets is beyond bond yields. A recent report showed that the number of Americans applying for new unemployment benefits fell to the lowest level in a month, indicating that the US labor market remains very healthy, despite signs of a cooling effect.
While major indices like the Dow and S&P 500 were almost unchanged, with the Dow up just 0.07%, the Nasdaq showed a slight decline, marking the end of its previous four-session winning streak. This is a clear demonstration of the pressure that high yields are putting on tech stocks that have driven the market higher on hopes of a low interest rate environment and high profit potential from artificial intelligence.
This situation highlights the importance of contributions from other sectors of the economy if we are to see the overall market continue to rise. At the same time, the cryptocurrency market also needs to pay attention to adjusting its strategy if it wants to maintain its attractiveness and avoid being negatively affected by broader economic factors.
(Quoted from a Reuters news source)