Bitcoin continued to slide on Thursday, amplifying losses recorded overnight as a jump in oil prices and higher Treasury yields increased concerns about the prospect of further interest-rate increases. By 02:14 ET (06:14 GMT) the world’s largest crypto had fallen 2.7% to $84,148.7.
Despite the pullback, Bitcoin remained on solid footing for September overall, as investors had been buoyed by signs of greater regulatory accommodation from the U.S. government earlier in the month.
Market drivers: yields and oil
The move lower in risk assets coincided with a broad advance in bond yields. The U.S. 10-year Treasury yield climbed back above 5%, reaching its strongest level since 2007, after resilient U.S. purchasing managers index data and hawkish commentary from a Federal Reserve Governor increased market bets on further rate hikes in coming months.
Last week the Federal Reserve raised its policy rate by 25 basis points and reiterated its 2% inflation objective - messaging that markets took as consistent with the likelihood of additional tightening. Yields spiked not only in the United States but across developed markets, with Japanese 10-year yields advancing to a 30-year high on Thursday.
Higher yields tend to make speculative, high-volatility assets less attractive because fixed-income instruments can provide relatively better returns when rates rise. That dynamic weighed on crypto sentiment as investors stepped back from positions after rapid sector gains.
Adding to the risk-off tone, oil prices rebounded overnight. The rally in crude followed a forceful address by Iranian President Masoud Pezeshkian at the United Nations General Assembly in New York City, in which he criticized the U.S. and President Donald Trump - a speech that markets interpreted as tempering hopes for near-term diplomatic easing between the U.S. and Iran.
Crypto market reaction
Broad crypto market prices extended losses as weakened risk appetite prompted some profit-taking after a strong run of gains through September. Optimism earlier in the month had been driven in part by regulatory developments in the U.S., notably a U.S. Securities and Exchange Commission decision to grant a five-year exemption for certain blockchain-based stock offerings. That regulatory relief had helped altcoins produce outsized returns, allowing markets to look past the failure of the Clarity Act to clear Congress.
On Thursday, world no.2 crypto Ether fell 2.5% to $2,685.83. XRP declined 7.5% to $1.5052. Solana slipped 3.3%, Cardano moved down 7.1%, and BNB dropped 2.5%. Memecoins also retraced earlier gains, with Dogecoin off 7.7% and $TRUMP down 11.4%.
What this means for markets
The immediate effect was a dampening of appetite for risk assets, visible in cryptocurrencies across market caps. The twin pressures of rising bond yields and a renewed move higher in oil added to the rationale for traders to take profits after a period of outsized crypto returns.
Absent new, explicit developments on regulation or macro data that contradict recent trends, the near-term market narrative is likely to remain sensitive to changes in yields and energy prices.
Hana Yamamoto