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The cryptocurrency market is experiencing a downturn, closely mirroring the decline in the stock market. On Wednesday, Bitcoin saw a significant drop of over 2.5% in the past 24 hours, with its price hovering around $65,000. This decline has dashed hopes of breaking the $70,000 threshold, which had gained traction just a week prior. The downward trajectory underscores the growing volatility in the crypto market and highlights the interconnectedness between cryptocurrencies and traditional financial markets.
The decline in Bitcoin can be attributed to mounting pressure on technology stocks, particularly Tesla (TSLA-2.01%), which is set to release its latest earnings after the closing bell. Analysts anticipate that Tesla will report earnings per share of 60 cents, a decrease from 66 cents a year ago, although the figure marks an improvement from 52 cents in the previous quarter, according to estimates from FactSet (FDS-0.28%). Revenue is projected to hit $25.4 billion, compared to $23.3 billion in the third quarter of 2023 and $25.5 billion in the preceding quarter.
Meanwhile, the yield on the benchmark 10-year U.S. Treasury note has continued its upward climb, reaching 4.23%—a level not seen since July. Higher bond yields traditionally create downward pressure on equity valuations. When Treasury yields rise, it suggests that investors are increasingly concerned about the economic outlook, leading them to favor safer investments like bonds over stocks.
Other significant cryptocurrencies have also faced losses. Ether, the second-largest cryptocurrency by market capitalization, has experienced a decline of over 3% in the last 24 hours, currently trading around $2,500. Cardano fell by more than 3.5%, Avalanche dropped by over 4.5%, and the popular memecoin Shiba Inu decreased by approximately 3%.
Overall, the global cryptocurrency market capitalization has contracted by 2%, now standing at $2.2 trillion, according to data from CoinMarketCap.