Bitcoin's price fell below $84,000 as the US 10-year Treasury yield reached its highest level since 2007. The yield closed Wednesday at 5.11%, up from 4.96% the previous day, and reached 5.13% intraday. Bitcoin slipped to $83,200 during Asian trading hours on Thursday.
Analysts have raised the odds of an October Federal Reserve rate hike to above 70%. The US Treasury announced a $6 billion ceiling for its Thursday buyback of bonds with roughly 20 to 30 years remaining, part of an expanded program to improve liquidity in long-dated debt.
Bitcoin has closed September higher for three straight years, while October has averaged a 19.92% gain, according to CoinGlass data. However, Bitcoin fell 3.69% in October last year.
Rising Treasury yields offer higher returns on government debt and can raise borrowing costs, potentially weighing on Bitcoin and other risk assets. An October hike would raise short-term borrowing costs, potentially raising the cost of dollar-funded leveraged Bitcoin trades.
Bas Kooijman, CEO and asset manager at DHF Capital, noted that stronger US business activity and elevated energy prices had increased expectations of further Federal Reserve tightening. Markets now assign around a 70% probability for a hike in October, up from roughly 55% yesterday, while expectations of additional tightening over the coming months have also increased.
