Bitcoin’s Value Surges Past $95,000 Despite Christmas Market Decline

Bitcoin’s Holiday Rally Fizzles Out

Bitcoin’s price surged just ahead of Christmas but fizzled out on Thursday morning, retreating to roughly $95,000 after a rapid decline. The cryptocurrency was trading at $95,300, down 3.1% over the past 24 hours.

The broader market followed suit, with the CoinDesk 20 Index lower by 4.2% and several other cryptocurrencies in the index sporting significant losses. U.S. markets are open on Thursday, but stock index futures point to modest early losses, while gold and oil are marginally higher.

Despite bitcoin’s impressive year-to-date gains, the cryptocurrency’s price action over the past few days has been marked by low trading volume. However, it appears that the recent tailwind of lower interest rates may have become a headwind. The 10-year Treasury yield continued to drift upward on Thursday, now at 4.63% and within a few basis points of its 2024 high.

This rapid move upward in long-term rates is nearly unprecedented in modern monetary history, according to macro researcher Jim Bianco. He noted that the bond market will continue to sell higher yields as the Fed talks about rate cuts in 2025. If the Fed does not back off the rate-cutting talk, bond yields could rise to levels that would start breaking inflation.

What’s Behind Bitcoin’s Decline?

Bitcoin’s decline on Thursday morning appears to be driven by a combination of factors, including the swift move upward in long-term rates and the potential for higher interest rates in 2025. While lower interest rates were previously seen as a positive factor for bitcoin, it seems that this trend may have reversed.

The Fed’s recent rate cut was intended to support economic growth and inflation, but the rapid increase in long-term rates suggests that this may not be having the desired effect. As Bianco noted, the bond market is becoming increasingly bearish on the prospects of future rate cuts.

Looking Ahead

Bitcoin’s price action will likely continue to be influenced by interest rate developments in 2025. As the Fed prepares to make its next move, investors will be watching closely for signs of whether the central bank will stick to its rate-cutting agenda or reverse course. In the meantime, bitcoin’s price remains uncertain, trading at $95,300 and down 3.1% over the past 24 hours.