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Bitcoin slipped under $77,000 Thursday morning as Wall Street opened and US bond yields surged to levels nobody’s seen in close to two decades. Not a great day for risk assets.
The drop didn’t happen in a vacuum. Oil prices are climbing hard, Middle East tensions are keeping traders on edge, and the Federal Reserve is staring down a rate decision that could move markets in a big way. Bitcoin fell alongside US stocks — pretty much everything tied to risk appetite took a hit as the macro picture got messier by the hour.
Oil Above $100, Yields at Multi-Decade Peaks
WTI crude blew past $100 per barrel for the first time since May 2021. Brent crude came close to a 16-week high, touching over $105 per barrel. Those numbers matter because energy prices feed directly into inflation data, and right now inflation is the thing everyone’s watching.
Bond yields told an even wilder story. The 30-year US Treasury yield hit 5.353% — a peak not seen since June 2007. The 10-year yield climbed to 4.924%, its highest since late 2023. And that’s despite the Treasury running a $6 billion buyback of long-term debt, which was basically supposed to ease some of the pressure. It didn’t. The Kobeissi Letter flagged the tension between those rising yields and Treasury operations, calling out the significant financial implications of the situation.
Higher yields make borrowing more expensive for everyone — governments, businesses, consumers. And they pull money out of speculative assets. Bitcoin kind of sits in that speculative bucket for a lot of institutional players, so when yields spike, crypto often bleeds.
Fed Rate Hike Odds Jump Overnight
The US Producer Price Index for August came in at 5.4% year-on-year, slightly above expectations. That one number moved markets fast. The CME Group’s FedWatch Tool jumped from a 61.2% probability of a 0.25% rate hike at the Fed’s September meeting to 69.8% — basically overnight. That’s a big shift in market pricing, and traders felt it immediately.
The Consumer Price Index report is due Friday. It’s the last major inflation print before the Federal Reserve sits down to make its rate call. Unclear exactly what the number will show, but given the PPI miss and oil prices where they are, expectations are running hot. No further comments from the Federal Reserve were available.
The Federal Reserve’s September 16 meeting is now a serious focal point. Traders are repositioning. International investors are watching. The outcome will probably shape market sentiment well beyond just the crypto space — bond markets, equities, everything is lined up waiting for that call.
Meanwhile, the US Bureau of Labor Statistics added another data point into the mix: prices for final demand excluding food, energy, and trade services rose 0.3% in August, following a 0.4% increase in July. Persistent. That’s the word for it. Inflationary pressure isn’t going away fast, and the numbers keep showing that.
ECB Moves Too, Adding Global Pressure
It’s not just the Fed. The European Central Bank raised its rates by 0.25% — its second hike of 2026. Central banks across the developed world are basically running the same playbook: keep hiking until inflation breaks. The ECB’s move adds another layer of complexity to an already messy global picture, and markets are watching whether other central banks follow or start to diverge.
For crypto, the double pressure from both the Fed and ECB tightening at the same time isn’t great. Bitcoin has struggled to hold gains whenever rate hike expectations rise, and right now those expectations are climbing fast on both sides of the Atlantic.
Investors are adjusting positions in real time. Some are probably moving into cash or short-duration bonds — assets that actually benefit from higher rates. Bitcoin doesn’t fit that description. It’s a long-duration, high-volatility bet, and that’s a hard sell when 30-year Treasuries are yielding 5.353%.
The CPI report Friday will either confirm or complicate the current rate hike narrative. If it comes in hot, the 69.8% probability on the FedWatch Tool could push even higher, and Bitcoin could see more selling pressure before the Fed even opens its mouth on September 16. If it surprises to the downside, there’s maybe some relief — but probably not much, given oil prices are still sitting above $100.
WTI crude above $100. Brent above $105. The 30-year yield at 5.353%. Bitcoin under $77,000.
Frequently Asked Questions
Why did Bitcoin fall below $77,000?
Bitcoin dropped below $77,000 as US bond yields surged to multi-decade highs, oil prices climbed above $100 per barrel, and inflation data pushed Federal Reserve rate hike expectations higher.
What did US bond yields hit on Thursday?
The 30-year US Treasury yield reached 5.353%, its highest since June 2007, while the 10-year yield hit 4.924%, its highest since late 2023.
What is the current probability of a Fed rate hike in September?
Per the CME Group’s FedWatch Tool, the probability of a 0.25% rate hike at the Federal Reserve’s September meeting stood at 69.8%, up from 61.2% the previous day.
Why It Matters
The decline in Bitcoin's price amid rising Treasury yields underscores the increasing correlation between cryptocurrencies and traditional financial markets, particularly in times of economic uncertainty. As risk assets face downward pressure from escalating geopolitical tensions and impending monetary policy decisions, Bitcoin's performance may reflect broader investor sentiment and risk appetite, making it a barometer for market stability. This trend highlights the challenges for Bitcoin as it seeks to establish itself as a safe-haven asset in the face of traditional financial pressures.
