Bitcoin experienced its steepest weekly decline since early June, sliding 10.2% to close at $68,099.30 by 18:03 ET (23:03 GMT) on Friday, marking the first sub‑$70,000 price level since mid‑August. The tumble coincided with a broader crypto‑market sell‑off driven by rising expectations of Federal Reserve rate hikes, heightened regulatory concerns under a Democratic‑controlled U.S. Congress, and the impending removal of Strategy’s Bitcoin treasury from MSCI benchmark indexes effective 30 November.
U.S. macro data released earlier in the week reinforced a hawkish outlook. Non‑farm payrolls rose by 165,000 in October, far exceeding the consensus estimate of 65,000, while employment figures for August and September were revised upward by a combined 84,000. Consumer price index (CPI) data showed a headline increase of 0.4% month‑on‑month in October, modestly lower than September’s 0.6% rise but still above the 0.3% market expectation. Core CPI, which excludes food and energy, held steady at 0.3% month‑on‑month, slightly above the 0.2% consensus.
Fed Governor Christopher Waller stated on Tuesday that he would support a rate increase even if inflation data were cooler, suggesting that a 50‑basis‑point hike could be justified under hot data conditions. The latest producer price index (PPI) report offered some relief, with headline PPI up 0.3% month‑on‑month in October, a sharp deceleration from September’s 1.4% rise and below the 0.4% consensus. Year‑over‑year, headline PPI rose 6.5%, marginally under the 6.6% forecast, yet it remains the largest 12‑month increase since November 2022.
According to CME’s FedWatch tool, market participants view a December Fed rate hike as almost certain. The probability of a 25‑basis‑point increase stands at roughly 90%, while the odds of a larger 50‑basis‑point move are about 10%. Such a higher‑rate environment typically depresses speculative assets, including cryptocurrencies.
MSCI’s decision to exclude the world’s largest Bitcoin treasury and similar funds from its indexes, effective at the end of November, does not trigger immediate selling pressure but limits the fund’s ability to raise new capital—a primary source of financing for its large Bitcoin purchases. This restriction could eventually compel the fund to liquidate holdings to meet capital and debt obligations, echoing a similar sell‑off earlier in the year.
Altcoins mirrored Bitcoin’s weakness, with most posting steep weekly declines. Ether fell 13.9% for the week, trading at $1,918.97. XRP dropped 14.5%, while Binance Coin (BNB) slid 9.2% after a devastating hack that drained approximately $6 billion from Binance in late October. Cardano and Solana declined 9.6% and 13.2% respectively. Memecoins also suffered, with Dogecoin down 11.4% and $TRUMP down 11% over the same period.
Overall, the confluence of robust U.S. labor market data, persistent inflationary pressures, and regulatory headwinds has created a challenging environment for digital assets, prompting a broad-based price correction across the cryptocurrency market.