Bitcoin, Ether fall as 2-year bonds near 15-year highs

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.

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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.

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