Bitcoin falls below $98,000 due to Treasury yields increasing pressure on risk assets.

On Tuesday, risk assets were broadly affected as Treasury yields spiked.

The flagship cryptocurrency's price decreased by 4.8% to $97,183.80, while the broader cryptocurrency market, as measured by the CoinDesk 20 index, dropped more than 5%, according to Coin Metrics.

Bitcoin miners and crypto stocks both experienced a decline, with crypto stocks falling more than 7% and Bitcoin miners dropping about 5% each.

The sudden increase in the Institute for Supply Management's data reflected faster-than-expected growth in the U.S. services sector in December, adding to concerns about stickier inflation. As a result, rising yields tend to pressure growth-oriented risk assets.

On Monday, Bitcoin surpassed $102,000 and is predicted to increase to twice this value by the end of the year. Investors are optimistic that clearer regulation will positively impact digital asset prices and, in turn, benefit companies such as Coinbase and Square.

The uncertainty about the Federal Reserve's interest rate cuts could negatively affect crypto prices. In December, the central bank announced that it would cut rates a third time, but it may not make as many cuts in 2025 as investors had predicted. Historically, rate cuts have boosted bitcoin prices, while hikes have lowered them.

Bitcoin has experienced a 120% increase in value from the beginning of the year.