Key facts
- Bitcoin fell 3% to $61,233, and gold dropped 2% to below $4,200 an ounce.
- Other cryptocurrencies like Ether, Solana, and XRP also declined.
- Asian equities, including South Korea's Kospi, tumbled significantly.
- Treasury yields rose as markets anticipate higher interest rates.
- A potential hot inflation print could reinforce a hawkish stance from the Federal Reserve.
Bitcoin and gold experienced synchronized declines as market sentiment shifted towards expectations of higher interest rates, driven by anticipation of a hawkish U.S. inflation report and Federal Reserve policy.
Bitcoin traded at $61,233, down 3% over 24 hours and 6.9% for the week, while gold fell 2% to below $4,200 an ounce. This correlated movement is attributed to both assets being non-yielding stores of value, which lose appeal when interest rate expectations rise. Other cryptocurrencies, including Ether, Solana, and XRP, also saw significant price drops.
Across global markets, South Korea's Kospi, heavily influenced by AI-related chipmakers, tumbled 6.3%, contributing to a 2.5% drop in MSCI's Asia-Pacific equity gauge. Nasdaq 100 futures indicated a lower open after a volatile Wall Street session. Meanwhile, Brent crude held near $92 a barrel due to renewed U.S. strikes on Iran, and the 10-year Treasury yield climbed to 4.54%.
Traders are positioning for sustained higher rates, a scenario that could drain liquidity from riskier assets. The recent bounce in Bitcoin was characterized as a short squeeze, with over $500 million in bearish bets liquidated, rather than fresh buying. Analysts note that meaningful spot demand has yet to return, with cautious institutional behavior evidenced by outflows from U.S. spot Bitcoin ETFs.