U.S. stocks continued their decline on Tuesday: the Dow fell 0.63%, the S&P 500 dropped 0.45%, and the Nasdaq slid 0.78%. The 10-year Treasury yield broke 5% and hit the highest level since 2007. The market has nearly priced in a 25bp rate hike by the Fed on Wednesday (FedWatch is betting 94.5%, up from just 33.1% a month ago).

Safe-haven flows pull the tech and crypto stocks lower across the board: SpaceX dropped more than 3%, crypto-related names including Circle fell more than 11%, Coinbase fell more than 10%, and Strategy fell by more than 5%. The U.S. crypto regulatory bill, the Clarity Act, did not pass the Senate procedural voting stage, and progress on a comprehensive industry regulatory framework has been set back.

Interest rates rising combined with regulatory uncertainty are two main lines suppressing risk assets right now. Crypto, as a high-beta asset, often takes the brunt first and reflects liquidity and policy inflection points earlier as well. In this kind of environment, it’s more practical to focus on real demand on-chain rather than market sentiment on the screens.

Market observation does not constitute investment advice.