Key facts
- Bitcoin fell below $63,000, trading at $61,850, a 3.4% drop over 24 hours.
- WTI crude oil reached a one-month high of $77.50 per barrel, up 8.5%.
- Treasury yields climbed, with the 2-year yield hitting 4.27% and the 10-year reaching 4.6%.
- Fed Governor Chris Waller indicated a potential rate hike if inflation remains elevated.
- AI-related stocks and Bitcoin miners experienced significant price drops.
Bitcoin experienced a sharp decline, falling below the $63,000 mark as geopolitical tensions in the Middle East and hawkish signals from the Federal Reserve weighed on markets. WTI crude oil surged by 8.5% to a one-month high of $77.50 per barrel following President Trump's announcement of an "Iranian Blockade" and renewed airstrikes against Iranian targets.
Federal Reserve Governor Chris Waller indicated that the Federal Open Market Committee (FOMC) would need to consider tightening monetary policy if upcoming inflation data shows persistent strength, aiming to avoid repeating past mistakes. This sentiment contributed to a significant rise in Treasury yields, with the two-year yield reaching a multi-year high of 4.27% and the 10-year yield climbing to 4.6%.
The broader market also felt the pressure, with the Nasdaq down 1.5% and favored AI-related technology stocks experiencing substantial drops. Bitcoin miners, many of whom have diversified into AI data centers, were also hit, with stocks like MARA Holdings, Riot Platforms, CleanSpark, Iren, and Hut 8 all falling around 5%.
Markets are now focused on Tuesday's June Consumer Price Index (CPI) report. While headline inflation is expected to decline due to lower oil prices, core inflation, which excludes volatile energy and food components, is forecast to remain flat month-over-month and year-over-year at 0.2% and 2.9%, respectively. This data will be crucial in determining the Fed's next move on interest rates.
Separately, Charles Schwab's director of digital currencies research and strategy, Jim Ferraioli, commented on Bitcoin Improvement Proposal 110 (BIP-110), characterizing the debate as a governance dispute rather than a security threat, though it could lead to temporary volatility.