Crypto prices and crypto-related stocks fell sharply on Thursday following a stronger-than-expected U.S. economic report that dampened hopes for an upcoming Federal Reserve rate cut.

The U.S. government revised second-quarter gross domestic product (GDP) growth to 3.8% annualized, up from the prior estimate of 3.3% and well above the initial 3% reading. Meanwhile, initial jobless claims dropped to 218,000, below expectations of 235,000, signaling continued strength in the labor market.

The unexpectedly robust data reduced the likelihood of further rate cuts. According to CME FedWatch, traders now see just a 17% chance that the Fed will keep rates unchanged next month, up from 8% a day earlier. The 10-year Treasury yield surged to nearly 4.20%, its highest in three weeks, pressuring both equities and risk assets.

Crypto Market Reaction

Bitcoin (BTC) dipped below $111,000, hitting its lowest level since early September before rebounding to $111,500, down 1.6% over 24 hours. Ether (ETH) fell below $4,000, losing 4.5%, while Solana (SOL), Dogecoin (DOGE), Avalanche (AVAX), and SUI saw even steeper declines.

ETH, which had outperformed BTC for months, has retraced significant gains, with the ETH/BTC ratio now roughly flat year-to-date, compared to a 20% gain four weeks ago. Solana, a recent market favorite amid corporate adoption and digital asset treasury hype, dropped 6% in 24 hours and nearly 20% over the past week.

Crypto-Related Stocks Under Pressure

The broader crypto equities sector also sold off. MicroStrategy (MSTR), the largest corporate bitcoin holder, fell 4.5%, while Coinbase (COIN) declined 4.1%. Miners were hit harder: Cipher Mining (CIFR), despite early gains on news of its Google AI hosting deal, dropped 9.4%, HIVE Digital (HIVE), Bitdeer (BTDR), and Bitfarms (BITF) fell 6%-8%.

Stablecoin issuer Circle (CRCL) retreated 4.4%, and Galaxy Digital (GLXY) slid 3.7%, extending losses across the sector.