TLDR
- Bitcoin experienced a sudden 5.7% price drop, falling from $102,000 to $96,145
- U.S. bond yields hit an eight-month peak at 4.685%, drawing investors away from crypto
- Total Bitcoin ETF inflows fell dramatically to $52.9 million from $987 million
- November job openings increased to 8.098 million, beating market expectations
- Only BlackRock’s IBIT ETF saw positive inflows while other funds reported outflows
The cryptocurrency market faced renewed pressure on January 7, 2025, as Bitcoin prices retreated from recent highs, demonstrating the continuing influence of traditional economic indicators on digital asset values.
Trading data shows Bitcoin dropped from $102,000 to $96,145 within a single trading session, marking one of the sharpest declines in recent weeks. The movement came as traditional financial markets responded to new economic data and rising government bond yields.
Bond markets played a central role in the day’s events, with the U.S. 10-year Treasury yield climbing to 4.685%, its highest point since April 2024. The 7.5 basis point increase reflected growing investor interest in government securities, often seen as a safer investment option.
The Labor Department’s latest employment report revealed an unexpected increase in job openings, which rose to 8.098 million in November. This figure exceeded the predicted 7.740 million and represented a six-month high, suggesting continued strength in the American job market.
Financial analysts note this employment data could influence Federal Reserve policy decisions regarding interest rate adjustments. Previous market expectations had centered on multiple rate cuts during 2025, but recent economic strength may result in fewer reductions.
The shifting market sentiment became particularly visible in Bitcoin ETF flows. Total inflows fell to $52.9 million, marking a dramatic decrease from the previous day’s $987 million. This 94% reduction highlights the speed at which investor attitudes can change based on economic developments.
BlackRock’s IBIT emerged as a notable exception to the general trend, recording $596.11 million in new inflows. This positive movement stood in contrast to the outflows seen across other Bitcoin ETF products during the same period.
The ARK and 21Shares ARKB fund experienced the day’s largest exodus of capital, with outflows reaching $212.55 million. Grayscale’s offerings also saw substantial withdrawals, as their GBTC and BTC funds reported outflows of $125.45 million and $113.85 million respectively.
Other funds facing outflows included Fidelity’s FBTC, which saw $86.29 million exit the fund, and Franklin Templeton’s EZBC, recording a more modest outflow of $5.58 million. The remaining Bitcoin ETFs in the market reported no movement of funds during this period.
Trading activity remained robust despite the reduced inflows, with daily volume increasing to $4.62 billion from the previous day’s $3.96 billion. This higher volume suggests active market participation rather than passive selling pressure.
Additional economic data came from the December ISM services index, which rose to 54.1, surpassing market expectations of 53.5. This reading provided further evidence of economic resilience in the United States.
The Federal Reserve has previously indicated it expects approximately two interest rate reductions during 2025, fewer than many market participants had anticipated. Recent economic strength may support this more conservative approach to monetary policy adjustments.
Market attention now turns to upcoming Federal Reserve meeting minutes, scheduled for release on January 8, 2025. These documents may offer new insights into policymakers’ discussions about future rate movements.
The week’s economic calendar also features the nonfarm payroll report, due for release on Friday. This widely watched indicator could further influence market sentiment if it shows continued labor market strength.
Bitcoin’s price movement occurred alongside broader market changes, as U.S. stocks experienced a collective decline of approximately $625 billion in market value during the same trading session.
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