Bitcoin fell sharply on Friday as a surge in government bond yields triggered broad-based selling across equities, commodities, and crypto, with traders rapidly repricing Federal Reserve expectations from rate cuts to potential rate hikes in a matter of days. The selloff extended well beyond digital assets, with stocks, gold, and crypto-linked equities all declining simultaneously as markets grappled with the prospect of central banks returning to tightening mode.
Bitcoin drops to $78,600 before stabilizing
Bitcoin fell as low as $78,600 during Friday's US session — down roughly 4% from Thursday's high of $82,000 — before stabilizing slightly above $79,000, still lower by approximately 2.2% over the prior 24 hours. The drop erased the gains that had followed the Senate Banking Committee's advancement of the CLARITY Act on Thursday, a development that had briefly pushed Bitcoin back toward the critical $82,000 resistance zone before the bond market reaction overwhelmed the legislative tailwind.
The catalyst: a global bond market rout
The trigger for Friday's selloff was a sharp rise in government bond yields across major economies. The US 10-year Treasury yield climbed to 4.58% — its highest level in more than a year — as investors priced in a more aggressive Federal Reserve path in response to resurgent inflation. UK 10-year gilt yields surged to 5.2%, their highest level since 2008, signaling that the tightening concern is not confined to the United States but reflects a broader repricing of global rate expectations.
Oil added further inflationary pressure. WTI crude oil front-end futures jumped 3% to cross $100 per barrel, reinforcing the view that energy-driven price pressures are not abating — a dynamic that makes it increasingly difficult for central banks to justify holding rates steady, let alone cutting them.
Fed expectations flip dramatically: rate hikes now on the table
The most significant market development of Friday's session was the speed at which Fed rate expectations shifted. According to CME FedWatch data, market participants now see nearly 50% odds of at least one rate hike by year-end — with virtually zero probability assigned to any rate cuts. That represents a dramatic reversal from just one week ago, when traders were pricing a 28% chance of a cut and only 1% odds of a hike. The complete inversion of those probabilities in less than seven days reflects how rapidly this week's inflation data — hot CPI on Tuesday, elevated PPI on Wednesday, and oil above $100 on Friday — has reshaped the macro narrative.
Stocks and gold sell off alongside crypto
The selloff was broad and simultaneous across asset classes. The Nasdaq 100 opened Friday's session with a 1.7% decline and the S&P 500 fell 1.2%, as rising yields compressed equity valuations and risk appetite contracted sharply. Gold fell 2.5% to near $4,500 per ounce — an unusual move for an asset typically treated as an inflation hedge, suggesting the selloff reflected forced deleveraging and liquidity needs rather than a pure macro rotation.
Crypto stocks take the hardest hits
Crypto-linked equities declined more sharply than the broader market, reflecting their higher beta to risk sentiment. Coinbase fell nearly 6% and Robinhood dropped more than 3%. Digital asset investment firm Galaxy slid 5.4%. Stablecoin issuer Circle declined 7.4%, giving back a significant portion of this week's gains that had been tied to CLARITY Act progress. Strategy, the largest corporate Bitcoin holder, fell 5.4%, while Ethereum-focused treasury firm Bitmine lost almost 6%.
Bitcoin miners took the heaviest losses in the sector. MARA Holdings and Hut 8 each dropped around 7%, Cipher Mining fell nearly 9%, and Bitdeer sank almost 11% to lead declines across the mining cohort. Miners have become increasingly tied to AI infrastructure narratives in recent months — a positioning that amplifies their sensitivity to the kind of risk-off moves triggered by rising yields and inflation fears.
The bigger picture: inflation is winning
Friday's session crystallized a macro narrative that has been building all week. Three consecutive inflation surprises — CPI, PPI, and oil — have forced markets to confront the possibility that the Federal Reserve's next move may be a hike rather than a cut, a scenario that was virtually unthinkable in financial markets just two weeks ago. The speed of the repricing, from 28% cut odds to 50% hike odds in seven days, reflects how unprepared positioning was for that outcome.
For Bitcoin and crypto markets, the implications are significant. The institutional bid that has supported Bitcoin above $80,000 through recent weeks of macro uncertainty was built in part on an eventual Fed pivot narrative. With that narrative now running in reverse, the $78,600 low tested on Friday may not be the floor if bond yields continue to climb and the tightening narrative gains further momentum into the following week.
The CLARITY Act's advancement through the Senate Banking Committee remains a genuine long-term positive for crypto. But legislative tailwinds are proving no match for a bond market that is repricing the entire global rate environment in real time.