Bitcoin drops to $77.6k as U.S.-Iran fighting, rate jitters weigh
Investing.com-- Bitcoin fell on Wednesday, extending losses after logging strong monthly gains in August as renewed U.S.-Iran fighting and persistent uncertainty over interest rates weighed on risk-driven assets.
The world’s biggest crypto fell 1.4% to $77,670.6 by 02:04 ET (06:04 GMT), after rallying nearly 25% in August.
But this rally came to a halt in September as crypto markets were spooked by a resurgence in Treasury yields, while renewed U.S.-Iran military action also dented risk appetite.
Renewed buying action by top corporate holder Strategy offered limited support to Bitcoin, even as the company marked its first Bitcoin purchase in two months.
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U.S.-Iran tensions, rate jitters stall Bitcoin rally
The U.S. and Iran traded a fresh round of strikes overnight on Tuesday, as the countries remained at odds over the Strait of Hormuz.
Both sides signaled little intent to deescalate, with U.S. President Donald Trump threatening to attack Iran’s oil infrastructure, while Tehran warned of more attacks on U.S. bases in surrounding Gulf countries.
Oil prices rose sharply on the renewed fighting, which marked the worst U.S.-Iran hostilities in over a month.
Higher oil in turn factored into concerns over surging energy-driven inflation across the globe. Government bond yields across Japan, Australia, the U.S. and Europe surged on this notion, further pressuring risk-driven assets.
Markets were seen rapidly increasing bets that the Federal Reserve will hike interest rates in September, especially as inflation remains well above the bank’s 2% annual target.
Higher rates bode poorly for purely speculative assets such as Bitcoin. The crypto’s August rally was fueled chiefly by a drop in yields.
Focus this week is squarely on U.S. nonfarm payrolls data, due Friday, for more cues on rates. Any signs of resilience in the labor market give the Fed more headroom to hike.
Crypto price today: altcoins extend losses after strong August
Broader crypto prices largely retreated on Wednesday after also logging strong gains in August.
World no.2 crypto Ether fell 2.1% to $2,419.3, while XRP fell 2.7% to $1.3461.
Solana and Cardano fell 3.3% and 1.2%, respectively, while BNB fell 0.3%.
Memecoins Dogecoin and $TRUMP fell 1.9% and 4%, respectively.
