Bitcoin falls as US inflation overshoot and bond yields hit 19-year high
Bitcoin slips below $77,000 as macro pressures build
Bitcoin (BTC) fell below $77,000 on Thursday as higher-than-expected US inflation data and surging bond yields weighed on risk assets. The drop coincided with a broader market downturn driven by economic factors.
Key factors behind the price decline
- US Producer Price Index (PPI) inflation rose 5.4% year-on-year in August, above forecasts.
- Oil prices jumped, with WTI crude passing $100 per barrel due to Middle East tensions.
- The US 30-year bond yield hit 5.353%, its highest level since June 2007.
- Market expectations for a Federal Reserve rate hike increased to 69.8% for the September meeting.
US producer prices show inflation above expectations
The US Bureau of Labor Statistics (BLS) reported that the PPI for final demand increased 5.4% in August from a year earlier. Core prices, which exclude food, energy, and trade services, rose 4.7% over the same period. This official data confirmed that inflation remained persistent.
Oil surges and bond yields rise despite intervention
TradingView data indicated that WTI crude oil exceeded $100 per barrel, and Brent crude neared $105 per barrel, driven by Middle East strikes. The US Treasury executed a $6 billion buyback operation, but the 30-year bond yield still surged to 5.353%, and the 10-year yield reached 4.924%, its highest since November 2023. The Kobeissi Letter, a trading resource, warned that high borrowing costs could affect governments and consumers.
Confirmed economic data and market reactions
Confirmed facts include the PPI inflation rate of 5.4%, oil price levels above $100 per barrel, bond yield highs of 5.353% for the 30-year and 4.924% for the 10-year, and increased Fed rate hike expectations to 69.8% for September. Bitcoin’s price decline to below $77,000 was also reported.
Why this matters for crypto and broader markets
Higher inflation and bond yields typically make borrowing more expensive, which can reduce investment in riskier assets like cryptocurrencies. This event underscores how macroeconomic factors, such as inflation reports and central bank policies, directly impact Bitcoin and other digital assets.
Eyes turn to US CPI report and Fed meeting
The next key event is the release of the US Consumer Price Index (CPI) report on Friday, which will provide further inflation data before the Federal Reserve’s rate decision on September 16. The European Central Bank also enacted a 0.25% rate hike on Thursday.
