Bitcoin fell on Wednesday, extending its losses after posting strong gains in August, as renewed U.S.-Iran hostilities and ongoing uncertainty around interest rates weighed on risk-sensitive assets.
The world’s largest cryptocurrency dropped 1.07 percent to $76,567 by 11:03 GMT, following a nearly 25 percent gain in August.
Rising Treasury yields weigh on crypto markets
The Bitcoin rally lost momentum in September as rising Treasury yields unsettled crypto markets, while renewed U.S.-Iran military action further weakened investor appetite for risk.
Fresh Bitcoin purchases by corporate holder Strategy provided only limited support, despite the company making its first acquisition of the cryptocurrency in two months.
Further impacting sentiment, the U.S. and Iran exchanged another round of strikes overnight on Tuesday as tensions between the two countries remained high over the Strait of Hormuz.
Neither side showed signs of backing down, with U.S. President Donald Trump threatening strikes against Iran’s oil infrastructure, while Tehran warned that it would launch further attacks on U.S. military bases across the Gulf.
The escalation, which marked the most intense U.S.-Iran fighting in more than a month, sent oil prices sharply higher and heightened concerns about a renewed wave of energy-driven inflation globally.
Government bond yields climbed across Japan, Australia, the U.S. and Europe as markets assessed the potential inflationary impact of higher energy costs, adding further pressure on risk-sensitive assets like Bitcoin.
Read: Bitcoin rises 1.39 percent to $79,081 as Ether, XRP and Solana gain despite higher yields
Fed rate hike bets grow
Investors also increased their expectations of a Federal Reserve interest-rate hike in September, particularly as inflation remains well above the central bank’s 2 percent annual target.
Higher borrowing costs tend to weigh on speculative assets such as Bitcoin, whose August rally was largely supported by falling yields.
Attention now turns to Friday’s U.S. nonfarm payrolls report, which could provide further clues on the Fed’s rate path. A resilient labor market would give policymakers greater scope to raise interest rates.
Most major cryptocurrencies also declined on Wednesday, extending a pullback after posting strong gains in August.
Ether, the world’s second-largest cryptocurrency, fell 3.72 percent to $2,367.65, while XRP declined 4.72 percent to $1.3169.
Solana dropped 4.25 percent and Cardano slipped 3.30 percent, while BNB fell 0.80 percent.
Among memecoins, Dogecoin fell 3.03 percent, while $TRUMP remained flat.
