Bitcoin Hit Hard by Inflation Fears, Suffers Worst Daily Drop Since January

Bitcoin has only fallen this much during a single day on one other occasion this year

article-image

Blockworks exclusive art by axel rangel

share

key takeaways

  • Crypto markets lost $140 billion after market sentiment turned sour on jitters surrounding the Federal Reserve’s latest efforts to control inflation
  • Bitcoin tanked 10% to notch its second-largest intraday fall this year and traded at its lowest point in four months

Bitcoin recorded its worst daily drop in four months on Thursday, dropping almost 10% to lows not seen since January.

The top cryptocurrency by market capitalization started the day at $39,727, but by mid-afternoon ET slid below $36,000, according to CoinMarketCap data.

Bitcoin has plummeted this much in a single day on just one other occasion this year. On January 21, BTC opened at $40,699 but gradually dropped 12% to trade below $35,800 by the end of the day.

The rest of the crypto market followed suit. Ether lost about 7%, while Solana was the worst hit of the top 10 digital assets, losing 15%. 

Cryptocurrencies overall shed 7.5%, or $140 billion — from $1.9 trillion to $1.76 trillion, marking the market’s lowest capitalization since February.  

Weak crypto echoed sentiment across equities. During intraday trading, the Dow gave up 3.5%; the S&P 500 fell 5%; and the NASDAQ lost 5.5%. On the other hand, 10-year Treasury bond yields jumped 3.1%.

The losses came despite general market enthusiasm Wednesday, when both the S&P and NASDAQ jumped about 3%. 

Analysts figured the widespread relief rally showed confidence in Federal Reserve Chair Jerome Powell’s ability to taper inflation without triggering a recession.

Powell had pledged to not hike the benchmark interest rate by 0.75% in the immediate future, instead re-affirming his 50-basis point strategy.


Get the news in your inbox. Explore Blockworks newsletters:

  • Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
  • Empire: Start your morning with the top news and analysis to inform your day in crypto.
  • Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
  • 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
  • Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
  • The Drop: For crypto collectors and traders, covering apps, games, memes and more.
  • Supply Shock: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.
Tags

Upcoming Events

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

tg trading bot report graphic.png

Research

Telegram trading bots have found their primary niche in highly speculative token launches and retail-dominated memecoin markets, with many features specifically tailored to token sniping and copy-trading strategies.

article-image

Ethereum is hoping that increased DA will grow user demand — and its profits through DA fees

article-image

11 years ago, Bitcoin contributors prevented a supply crisis… two centuries from now

article-image

Both samczsun and ZachXBT have issued warnings after the Bybit hack last month

article-image

The investor criticized Michael Saylor’s plan to render his personal bitcoin holdings inaccessible to anyone else forever

article-image

The exchange has structural defenses and protocols to limit manipulations

article-image

Upshift is being spun out of August, which raised $10 million earlier this month