Bitcoin Drops Below $79,000 as Treasury Yields Surge, Inflation Fears Return
Summary
- Bitcoin (BTC) plunged to as low as $78,600 as U.S. Treasury yields surged and fears of renewed inflation spread through markets.
- BTC, which had risen to $82,000 after passage of the CLARITY Act, is now trading around $79,000.
- Markets are focused on rising energy prices, Treasury yield movements, the Federal Reserve's policy direction, and the possibility of at least one rate hike this year.
Forecast Trend Report by Period
Bitcoin fell sharply as a jump in U.S. Treasury yields and renewed inflation concerns triggered broader selling across global risk assets.
CoinDesk reported on May 15 that Bitcoin briefly dropped to $78,600.
Bitcoin had earlier climbed to $82,000 after the U.S. Senate Banking Committee passed the CLARITY Act. It later reversed course and was recently trading near $79,000.
The selloff spread beyond cryptocurrencies to U.S. stocks and gold.
The Nasdaq 100 and the S&P 500 opened down 1.7% and 1.2%, respectively. Gold prices also fell about 2.5%.
Oil prices, however, extended their gains, with West Texas Intermediate futures topping $100 a barrel.
Markets are focused on whether rising energy prices and the risk of reaccelerating inflation will heighten concerns that major central banks may resume tightening.
The yield on the 10-year U.S. Treasury rose to 4.58%, the highest level in a year.
The yield on the 10-year U.K. government bond also climbed to 5.2%, its highest level since 2008.
Meanwhile, CME FedWatch data shows markets are pricing in roughly a 50% chance of at least one rate hike this year, while expectations for a rate cut have effectively vanished.
Investors are now watching U.S. inflation data, moves in Treasury yields and the Federal Reserve's policy path.
JH Kim
reporter1@bloomingbit.ioHi, I'm a Bloomingbit reporter, bringing you the latest cryptocurrency news.