Bitcoin Drops Below $79,000 as Treasury Yields Surge, Inflation Fears Mount
Summary
- Bitcoin (BTC) plunged to as low as $78,600 amid a sharp jump in U.S. Treasury yields and fears of a renewed inflation rebound.
- BTC, which had climbed to $82,000 after the U.S. Senate Banking Committee passed the CLARITY Act, later reversed lower and was trading near $79,000.
- Markets are focused on the Federal Reserve's policy path as oil prices rise, gold prices fall, and CME FedWatch shows about a 50%% chance of at least one rate hike this year.
Forecast Trend Report by Period
Bitcoin fell sharply as surging U.S. Treasury yields and renewed inflation concerns triggered a broader selloff in global risk assets.
CoinDesk reported on May 15 that Bitcoin briefly dropped to $78,600.
The token had earlier climbed to $82,000 after the U.S. Senate Banking Committee passed the CLARITY Act. It later reversed lower and was trading near $79,000.
The retreat spread beyond cryptocurrencies to U.S. stocks and gold.
The Nasdaq 100 and S&P 500 opened down 1.7% and 1.2%, respectively, while gold prices fell about 2.5%.
Oil extended gains, with West Texas Intermediate futures rising above $100 a barrel.
Higher energy prices and the risk of reaccelerating inflation are stoking concerns that major central banks could resume monetary tightening.
The yield on the U.S. 10-year Treasury rose to 4.58%, the highest in a year.
The yield on the U.K. 10-year government bond climbed to 5.2%, reaching its highest level since 2008.
Meanwhile, CME FedWatch data show markets are pricing in about a 50% chance of at least one rate hike this year, while expectations for a rate cut have effectively vanished.
Investors are now watching upcoming U.S. inflation data, moves in Treasury yields and the Federal Reserve's policy path.
