Bitcoin (BTC) traded down 1.7% to $84,652.10 by 18:12 ET on Wednesday, extending its pullback from a recent rally that pushed it above $87,300—its highest level since late January. The broader crypto market also weakened, with Ether (ETH) slipping 2.2% to $2,692.05, while altcoins like XRP, BNB, Solana (SOL), Cardano (ADA), and Dogecoin (DOGE) all declined between 2% and 7.8% in the same period. Meanwhile, spot Bitcoin ETF inflows surged to $1.71 billion so far this week, marking their strongest weekly performance since late August, according to data from aggregator SoSoValue. The decline followed a Monday surge of nearly 7%, as investors reassessed risk appetite amid rising U.S. Treasury yields and heightened geopolitical tensions.
The 10-year Treasury yield surged 16.8 basis points to 5.116%, its highest level since July 2007, while the Federal Open Market Committee’s probability of a quarter-point rate hike in October rose to 68%—up from 55% the prior day. Brent crude futures also gained 4.3% to $103.50 per barrel, contrasting with the broader crypto downturn. The pullback reflects a broader shift in risk sentiment, as investors weighed the implications of elevated borrowing costs and diplomatic developments.
Geopolitical tensions further complicated markets. U.S. President Donald Trump addressed the United Nations General Assembly, threatening Iran with retaliation, while Iranian President Masoud Pezeshkian dismissed Trump’s rhetoric, stating that Iran would not bow to pressure. Meanwhile, U.S. Secretary of State Marco Rubio described ongoing U.S.-Iran talks as a continuation of prior discussions, without signaling a breakthrough. The visit by Chinese President Xi Jinping to Washington—his first state visit in over a decade—also contributed to volatility, as markets digested potential economic and geopolitical implications.
The Federal Reserve’s recent rate hike marked its first increase in over three years, and economic data in September highlighted mixed signals: U.S. business activity accelerated for a fourth consecutive month, but input costs and inflation remained elevated, reaching their highest levels since October 2022. The Clarity Act, a proposed SEC rule for Bitcoin ETFs, failed to advance earlier in September, adding to regulatory uncertainty. Despite these challenges, Bitcoin ETFs continued to attract capital, underscoring sustained demand for institutional exposure to digital assets.
The decline in Bitcoin and other cryptocurrencies follows a period of volatility, as investors balance speculative rallies with macroeconomic pressures. While ETF inflows suggest sustained interest, the broader market downturn reflects concerns over interest rate dynamics, geopolitical risks, and regulatory clarity—key factors shaping crypto asset performance in late September.
