Bitcoin Falls Below $60K as Fed Rate Hike Odds Jump to 73%
What You Need to Know
- Bitcoin fell below $60,000 for the first time since early 2024 following a stronger-than-expected jobs report.
- Federal Reserve rate hike probability jumped to 72.7% from 50.5%, causing Bitcoin and other risk assets to decline sharply.
- Bitcoin trades as a risk asset correlated with equities, not as an inflation hedge as some maximalists claimed.
- Spot Bitcoin ETF outflows pose a greater threat than retail panic selling by removing institutional demand support.
Bitcoin broke below $60,000 on Friday for the first time since early 2024, dragged down by a jobs report that effectively repriced the Federal Reserve’s policy path in a single afternoon. The CME FedWatch Tool showed the probability of a rate hike by year-end jumping to 72.7% from 50.5% the previous day, while the 10-year Treasury yield climbed above 4.53%.
The mechanism here is straightforward and has been consistent since 2020: crypto trades as a risk asset, not as a hedge. When the May jobs number came in at 172,000, nearly double expectations, it gave the Fed cover to hold or tighten further, and that repricing hit the Nasdaq, semiconductors, and Bitcoin in the same session. Ethereum dropped 23% on the week, Solana 22%. The correlation to equities that Bitcoin maximalists spent years dismissing is now the primary variable traders actually model. The last time rate expectations shifted this sharply against crypto was late 2021, when the Fed pivot toward tightening began unwinding the entire bull run over the following twelve months.
Strategy’s small Bitcoin sale earlier in the week, its first since 2022, was not the cause of this move, but it arrived at the worst possible moment for sentiment.
The more consequential question for the coming weeks is whether ETF outflows accelerate or stabilize. Spot Bitcoin ETFs were already seeing net outflows before Friday’s selloff, and sustained institutional exit is a different problem than retail panic selling: it removes the demand narrative that justified much of the post-halving price structure. The halving in April 2024 cut block rewards to 3.125 BTC, and the supply-shock thesis historically requires six to twelve months to show up in price, but that thesis depends on demand holding. If institutional holders are reducing exposure alongside tightening macro conditions, the supply argument becomes significantly harder to sustain.
Strategy is expected to disclose its weekly Bitcoin activity on Monday, and Standard Chartered’s Geoff Kendrick has suggested the firm may have bought aggressively following its sale, potentially at ten to one hundred times the volume sold. Whether that disclosure calms or extends the current pressure will say something real about how much of the recent market structure was built around a single corporate buyer.
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