Bitcoin Slides Below $83,000 as Treasury Yields Hit 2007 Highs
Bitcoin dropped below $83,000 as rising U.S. Treasury yields and a stronger dollar put pressure on risk assets, with traders now pricing in four additional Fed rate hikes by June 2027.
Bitcoin has fallen below $83,000, retreating from a local high of $87,500. The move comes as U.S. Treasury yields climb across the curve, with the 10-year yield rising above 5.1%, a level not seen since 2007.
Traders are adjusting to a longer period of tighter monetary policy. CME FedWatch data indicates that the market is pricing in four quarter-point rate hikes by June 2027, which would bring the federal funds rate to a range of 4.75% to 5%. This follows a 25 basis point increase by the Federal Reserve earlier this month.
The broader Treasury market is feeling the strain, with the 20-year yield approaching 5.5%. This shift has pushed the long-bond ETF, TLT, to all-time lows below $80. Borrowing costs are also rising internationally, with government bond yields under pressure in Germany, France, the U.K., and Japan.
A stronger dollar is adding to the headwinds for risk assets. The dollar index has climbed above 101, marking a 3% gain for the year. Meanwhile, the Japanese yen has weakened to 159 against the dollar, reversing much of its recent recovery.
Several factors are contributing to the rise in yields. The U.S. economy remains resilient, with the S&P Global composite PMI for September rising nearly 4.3% to 58.4, exceeding expectations. Additionally, uncertainty surrounding inflation due to Middle East tensions has pushed oil and diesel prices higher, while heavy borrowing to fund AI infrastructure has increased the supply of bonds competing with Treasuries.
Gold is also facing pressure, trading just above $4,200, which is down 25% from its all-time high in January.
