Bitcoin slid on Thursday, extending steep overnight losses as a surge in oil prices and Treasury yields heightened concerns over higher interest rates and weighed on risk appetite.
Bitcoin fell 1.21 percent to $83,360 by 10:05 GMT, extending losses alongside broader risk-driven markets.
The world’s largest cryptocurrency nevertheless remained on track for strong gains in September, supported by increased regulatory favor in the U.S. Its latest decline came as a sharp rise in bond yields prompted investors to reassess expectations for monetary policy.
Oil and Treasury yields pressure Bitcoin
Bitcoin fell as the U.S. 10-year Treasury yield climbed back above 5 percent, reaching its highest level since 2007, after stronger-than-expected U.S. purchasing managers’ index data and hawkish comments from a Federal Reserve governor fueled expectations of further rate increases in the coming months.
The Federal Reserve raised interest rates by 25 basis points last week and reiterated its commitment to returning annual inflation to its 2 percent target, which markets interpreted as signaling the possibility of additional rate hikes.
Bond yields also rose across other developed markets on expectations of tighter monetary policy. Japan’s 10-year government bond yield reached a 30-year high on Thursday.
Higher interest rates can weigh on speculative assets such as Bitcoin by making fixed-income investments relatively more attractive and increasing the cost of capital.
Oil prices added to concerns over inflation and interest rates after rebounding overnight, as expectations for further US-Iran diplomacy appeared to fade.
The rise in oil prices followed a strongly worded address by Iranian President Masoud Pezeshkian at the United Nations General Assembly in New York on Wednesday, in which he criticized the US and President Donald Trump.
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Crypto prices track Bitcoin lower
Broader cryptocurrency prices also declined on Thursday as weaker risk appetite prompted investors to take profits following strong gains across the sector in September.
Optimism over a more crypto-friendly U.S. regulatory environment had helped drive outsized gains in altcoins, particularly after the Securities and Exchange Commission announced a five-year exemption for blockchain-based stock offerings.
The move helped the market look past the failure of the Clarity Act to clear Congress.
Ether, the world’s second-largest cryptocurrency, fell 3.49 percent to $2,642.92, while XRP dropped 8.53 percent to $1.4584.
Solana declined 3.85 percent to $113.08, Cardano slid 7.67 percent and BNB fell 2.34 percent.
Among memecoins, Dogecoin dropped 7.89 percent, while $TRUMP fell 10.9 percent.
