Bitcoin extended losses early on Wednesday, falling 1.4% to $77,670.6 by 02:04 ET after a sharp August rally that saw the cryptocurrency gain nearly 25%. The decline came as geopolitical tensions and expectations of tighter U.S. monetary policy weighed on risk sentiment.
Renewed fighting between the U.S. and Iran over the Strait of Hormuz escalated overnight, marking the most severe hostilities between the two nations in more than a month. U.S. President Donald Trump threatened strikes on Iran’s oil infrastructure, while Tehran warned of further attacks on U.S. military bases in neighboring Gulf states. Oil prices surged in response to the escalation.
Concerns over energy-driven inflation pushed government bond yields higher across Japan, Australia, the U.S., and Europe. Markets rapidly increased wagers on a Federal Reserve rate hike at the September meeting, as inflation remained well above the central bank’s 2% target. Traders are closely monitoring U.S. nonfarm payrolls data due Friday for further clues on the Fed’s policy path.
Corporate activity provided limited support, with Strategy marking its first Bitcoin purchase in two months. The move offered little offset to broader market pressure.
Among major cryptocurrencies, Ether fell 2.1% to $2,419.3, XRP declined 2.7% to $1.3461, and Solana dropped 3.3%. Cardano slipped 1.2%, BNB eased 0.3%, and Dogecoin fell 1.9%. The memecoin $TRUMP dropped 4%.
