Bitcoin slips below $70,000, Circle's 16% slide leads crypto stock sell-off

Market participants are now pricing in rate hikes, and it could be weighing on risk assets.

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What to know:

• Bitcoin slipped back toward $69,000 on Tuesday as a broader pullback in risk assets weighed on crypto markets.
• Stablecoin issuer Circle and crypto exchange Coinbase led declines among digital asset-related stocks.
• Increasing expectations of Federal Reserve rate hikes fueled risk-off sentiment, while bitcoin continued its recent pattern of modest Monday gains followed by small Tuesday declines.

Bitcoin BTC$69,847.54 slipped back toward $69,000 on Tuesday morning as a broader pullback in equities spilled over into crypto markets.

After trading near $71,000 earlier in the session, BTC fell to around $69,600 in the early U.S. hours, tracking a broader reversal in risk assets. Ether (ETH), Solana (SOL) and XRP (XRP) were also down 2%-3% over the past 24 hours.

Bitcoin appears to be continuing to follow a familiar trend over the past three months. It has typically risen by just over 1% on Mondays and then fall slightly under 1% on Tuesdays, according to Velo data.

The move also came as software stocks rolled over, with the iShares Expanded Tech-Software Sector ETF (IGV) dropping about 4%. Crypto prices have moved closely in line with the sector in recent months, with both trending lower since October. That relationship was on full display again, with digital assets weakening alongside that particular area of tech.

The S&P 500 and Nasdaq equity indexes were 0.5% and 0.8% lower, giving up much of their Monday gains on news about talks between U.S. and Iran. Global yields continue to climb, the DXY remains firm above 99, and oil has risen 2% over the past 24 hours, reinforcing the broader risk-off tone.

Crypto-linked equities also came under pressure. Circle (CRCL), issuer of the USDC stablecoin, led declines, tumbling 16% in a sharp reversal after its recent rally that took the shares more than 100% higher in a month. Crypto exchange Coinbase (COIN) dropped 8%. The moves happened as CoinDesk reported late Monday that the latest version of the Clarity Act won't allow rewards on balances, limiting yields on stablecoins. "That weakens a key part of the bull case by making USDC harder to evolve from a payments utility into a real store-of-value product," Shay Boloor, chief market strategist at Futurum Equities, said in an X post.

USDT issuer Tether, key rival of Circle, also announced that it hired a "Big Four" accounting firm for a complete audit, seen as a major step to improve trust in USDT's reserve assets.

Shift in interest rate expectations

In one of the more remarkable 180-degree turnarounds in recent years, market participants have gone, in a matter of weeks, from debating how many central bank rate cuts there would be in 2026 to pricing in imminent rate hikes.

According to CME FedWatch, there's now zero chance of a rate cut at either the April or June Federal Reserve policy meetings, and instead about a 15% chance of a rate hike. The June Fed meeting would presumably be chaired by Kevin Warsh, whom President Trump has nominated to replace Jerome Powell as head of the U.S. central bank with the supposed intention of lowering borrowing costs.

More For You

Bitcoin may have already bottomed out near $60,000. Here’s why.

Implied volatility indicators DVOL and BVIV suggest peak fear has passed, with crypto leading traditional markets in pricing risk.

What to know:

• DVOL and BVIV reached levels consistent with previous cycle lows, reflecting elevated implied volatility and peak fear typically seen at market bottoms.
• Bitcoin volatility peaked in February, while the VIX only surged weeks later and remains below prior crisis highs, indicating traditional markets may still be adjusting.

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