The narrative was supposed to be different by now. Two years after the 2024 halving, with supply constrained and institutional adoption supposedly cemented, Bitcoin was meant to be trading on its own terms. Instead, it just fell below $60,000 for the first time since late 2024, dragged down by the same force that has governed risk assets for the past four years: the Federal Reserve.
The proximate cause is familiar. After Kevin Hassett's comments earlier this week suggesting markets were "terribly wrong" about the rate trajectory, traders have been forced to reckon with a Fed that may not just hold rates steady but could conceivably raise them again. The CME FedWatch tool now prices a 23% chance of a July hike—up from near zero a month ago. For an asset class that spent 2020-2021 gorging on zero-rate liquidity, this is existential weather.
The correlation problem
Crypto evangelists have long promised that Bitcoin would eventually decouple from traditional markets, serving as digital gold or an uncorrelated store of value. The data tells a different story. Over the past 90 days, Bitcoin's correlation with the Nasdaq 100 has hovered around 0.7—roughly where it sat during the 2022 drawdown. When growth stocks sneeze, Bitcoin catches pneumonia.
This week's selloff has been particularly brutal because it came without a crypto-specific catalyst. No exchange collapse, no regulatory crackdown, no protocol failure. Just the grinding realization that if the cost of capital rises, speculative assets suffer first and most. The $60,000 level had served as psychological support since the post-halving rally; its breach triggered cascading liquidations worth over $400 million in leveraged long positions.
Institutional buyers, retail sellers
The composition of the selling matters. On-chain data suggests that long-term holders—those who accumulated before the 2024 halving—have largely stayed put. The capitulation is coming from retail traders and short-term speculators, many of whom appear to be rotating into the SpaceX IPO, which has captured an enormous share of risk-appetite mindshare. When Elon Musk's rocket company offers a once-in-a-generation liquidity event, even true believers find reasons to trim their Bitcoin exposure.
Meanwhile, the spot Bitcoin ETFs that were supposed to provide a floor of institutional demand have seen net outflows for three consecutive weeks. BlackRock's IBIT alone shed $340 million in the past five trading days. The smart money, it turns out, is as rate-sensitive as everyone else.
Our take
Bitcoin's failure to hold $60,000 is less about the number than what it represents: the death, at least for now, of the decoupling thesis. The asset that was supposed to thrive on monetary chaos is instead being strangled by it. Until the Fed pivots—or until crypto develops genuine utility beyond speculation—Bitcoin will remain what it has been since 2020: a leveraged bet on liquidity conditions. The halving changed the supply schedule. It didn't change the demand equation.
