Markets: Bitcoin, Ether fall as 2-year bond nears 15-year high
Bitcoin and Ether fell in Wednesday morning trading in Asia along with all other top 10 non-stablecoin cryptocurrencies by market capitalization. Polygon saw the biggest drop, while BNB dropped the least. A series of economic data in the U.S. released on Tuesday, including earnings reports from retail giants and the rising rate of some Treasury bills, weighed down on equity markets.
- Bitcoin fell 1.6% in the last 24 hours to trade at US$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 US$1,658, rising 6.5% over the past seven days.
- Polygon lost 6.1% to US$1.39, though it still booked 10% gains over the past seven days. BNB fell 1.2% to US$311.48, but was still up 5.2% for the week.
- The total crypto market capitalization dropped 1.8% to US$1.11 trillion at 8 a.m. in Hong Kong. The total trading volume over the past 24 hours was up by 3.3% to US$66.70 billion.
- U.S. equities 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 Index dropped 2% and the Nasdaq Composite Index finished the day down 2.5%.
- The three key indices posted the biggest single-day losses since Dec. 15 as the S&P 500 cut its year-to-date gains in half while the Dow Jones wiped out almost all of its 2023 gains.
- The two-year Treasury note yield rose to 4.7% on Tuesday, the highest level since 2007, while the 10-year Treasury yield climbed to 3.9%. Elevated levels in Treasury bond yields represent a larger upside risk for yields, placing downward pressure on equities.
- The U.S. Federal Reserve will release the minutes from its Jan. 31 to Feb. 1 policy meeting on Wednesday, which investors will look to for hints on how the central bank may act to tackle inflation.
- Retail giants Walmart Inc. and Home Depot Inc., released their holiday season earnings reports on Tuesday. Walmart’s revenue rose 7.3% to US$164 billion from the previous year, while Home Depot fell short of expectations, reporting US$35 billion in Q4 revenue. Both companies projected 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 U.S. is expanding. The S&P Global services purchasing managers index (PMI) rose to an 8-month high of 50.5 in February, up from 46.8 in 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 the range of 4.5%-4.75% on Feb.1 to fight the inflation, the highest level since October 2007, with the latest Consumer Price Index data up 6.4% in January from a year ago, down from 6.5% in December and 7.1% in November.
- Analysts at the CME Group predict a roughly 75% chance that the Fed will raise rates by another 25 basis points next month.