Bitcoin’s price slid on Wednesday, just as U.S. Treasuries surged, with the 10-year yield climbing above 5% and reaching — its highest level since 2007.
The price of the leading cryptocurrency was down 2% over a 24-hour period Wednesday afternoon in New York, and was trading hands for $84,357.
Bitcoin’s price had surged earlier in the week as investors piled into exchange-traded funds. At one point, it soared as high as nearly $87,330.
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But its rally has since cooled. It dropped further on Wednesday afternoon around the time the U.S. Treasury said it will purchase up to $6 billion of longer-dated government debt on Thursday.
Bitcoin previously benefited from the Treasury Department’s announcement of buybacks — having its best run in months — but this time dropped.
The 10-year Treasury yield climbed above 5% on Wednesday for the first time in 19 years, after September’s flash PMI data came in well ahead of forecasts and pushed the composite index to a five-year high.
Inflation details added to the pressure: input costs across manufacturing and services rose to their highest level since October 2022, driven largely by fuel and transportation, while wage pressure also strengthened.
Rising yields are typically a headwind for bitcoin’s price. When safe government bonds pay 5%, holding an asset that generates no income becomes more expensive.
Higher rates also tend to strengthen the dollar and dampen appetite for risk-on assets. Bitcoin has repeatedly retreated this year when yields rose on inflation fears, often with ETF outflows and forced selling by leveraged traders amplifying the move.
This post Bitcoin Price Slips While US Treasury Yields Soar, Oil Prices Climb first appeared on Bitcoin Magazine and is written by Mathew Di Salvo.