Bitcoin Breaks $77K: Crypto Pays the Fed's Bill

Bitcoin fell below $77,000 on Friday as traders priced in a Federal Reserve interest rate hike, dragging 95 of the CoinDesk 100 index constituents into the red over a 24-hour period, per CoinDesk. The flagship cryptocurrency shed more than 5% across the week, with Zcash recording the steepest losses among major tokens.

The selloff tracks directly to the bond market, where 10-year US Treasury yields have pushed toward 5% ahead of inflation data expected to seal the case for a Fed move. When the cost of holding dollars rises, risk assets — and crypto in particular — absorb the first blow. Traders are not waiting for confirmation.

The timing is significant. Bitcoin has in recent cycles positioned itself as a hedge against monetary instability, but rate-hike environments have consistently exposed that claim. A Fed that raises borrowing costs next week would mark a direct repudiation of that narrative, at least for now.

For Malta-based crypto operators and licensed VFA service providers, a sustained downturn in digital asset valuations combined with tightening US monetary policy compounds the compliance costs already rising under ESMA scrutiny. The regulator watches; the market moves first.

AMP economist My Bui told Bloomberg that structural inflation drivers remain intact, suggesting no near-term pivot from the Fed. The floor, if there is one, has not been found.