Bitcoin Falls Below $111K, Crypto Stocks Plunge as GDP Revision Dampens Rate Cut Odds

The U.S. economy grew 3.8% in the second quarter, much higher than previously reported, sending yields higher and risk assets lower.

• Crypto prices added to losses as strong U.S. economic data impacted market expectations for Federal Reserve rate cuts.
• Bitcoin dropped below $111,000, its lowest since early September, while ETH led far steeper declines in the altcoin sector.
• Crypto-related stocks, including MSTR, COIN, DATs and miners, suffered sharp losses.

Crypto prices took another leg lower on Thursday while crypto-related stocks sold off after U.S. economic growth was revised sharply higher.

The U.S. government reported that gross domestic product expanded at a 3.8% annualized rate in the second quarter, up from 3.3% in the previous estimate and well above the 3% initially reported.

Alongside, initial jobless claims tumbled to 218,000 from 232,000 the previous week and well below expectations for 235,000 — putting into question the idea that the employment market is weakening.

The much-stronger than anticipated data tapered expectations for the Federal Reserve cutting interest rates further next month. Traders now assign a 17% chance the Fed keeps rates unchanged, up from 8% a day earlier, according to the CME FedWatch.

The 10-year U.S. Treasury yield surged to nearly 4.20% following the reports, highest in three weeks. That helped send U.S stocks lower, with the Nasdaq sliding more than 1%. It’s since trimmed that loss to 0.5%.

After strongly outperforming bitcoin for several months, ETH has given up major ground, with the ETH/BTC ratio having returned to flat year-to-date versus up 20% four weeks ago.

Solana’s (SOL) has been another recent favorite amid hype of newly formed digital asset treasury company’s and increased corporate adoption. It, though, is lower by 6% over the past 24 hours and nearly 20% over the last week.