Why is everything down? Macro shock turns Bitcoin and other risk assets red across the board

A broad market decline, affecting both the S&P 500 and the entire crypto market, is attributed to a layered macro shock. Key drivers include the Federal Reserve signaling higher-for-longer interest rates, which pushes up yields and compresses the present value of long-duration assets like growth stocks and crypto. This adjustment has hit mega-cap tech and AI-related names—which led prior gains—particularly hard, causing cap-weighted indices to fall. Furthermore, there is a rotation of capital away from high-growth areas toward more defensive sectors like healthcare due to increasing policy and macro uncertainty, including US fiscal negotiation concerns and European budget outlooks. In crypto, Bitcoin and other digital assets, which behave as high-beta risk assets, suffer as rising real yields strengthen the dollar and prompt multi-asset funds to de-risk, leading to liquidations and reduced leverage demand.

(Source：CryptoSlate)