Bitcoin recovered from earlier declines on Thursday and traded broadly flat as investors remained cautious amid rising oil prices, surging Treasury yields, and growing expectations for further Federal Reserve rate hikes.
The broader cryptocurrency market also pared losses, with several major altcoins remaining on track for weekly gains after a strong rally earlier in the week.
Bitcoin was little changed at around $84,420 by 17:53 ET.
Despite Thursday’s muted performance, the world’s largest cryptocurrency remained firmly higher for September. Investors have continued to respond positively to a more supportive regulatory environment in the United States.
Treasury Yields Put Pressure on Bitcoin
Bitcoin’s earlier weakness came alongside a broader decline in risk-sensitive assets.
The move followed a sharp rise in U.S. Treasury yields, which reduced demand for speculative investments.
The benchmark 10-year U.S. Treasury yield climbed back above 5%, reaching its highest level since 2007.
Stronger U.S. purchasing managers index data and hawkish comments from a Federal Reserve governor reinforced expectations that interest rates could remain elevated or rise further.
Hawkish Federal Reserve Signals Weigh on Risk Assets
The Federal Reserve raised interest rates by 25 basis points last week and reaffirmed its commitment to bringing annual inflation back toward its 2% target.
Markets interpreted the message as a sign that additional rate increases could remain possible.
Bond yields also moved higher across other developed markets. In Japan, the 10-year government bond yield reached its highest level in roughly 30 years.
Higher interest rates generally reduce the appeal of assets such as Bitcoin because bonds and other fixed-income investments can offer more attractive returns with lower perceived risk.
Rising Oil Prices Add to Inflation Concerns
Higher oil prices added another layer of pressure to financial markets.
Crude prices extended their recent gains as expectations for diplomatic progress between the United States and Iran weakened.
The move followed a forceful speech by Iranian President Masoud Pezeshkian at the United Nations General Assembly in New York, where he criticized U.S. policy and President Donald Trump.
Rising energy prices can complicate the inflation outlook, increasing concerns that central banks may need to keep monetary policy tighter for longer.
Crypto Market Recovers From Earlier Weakness
Major cryptocurrencies followed Bitcoin higher from their session lows.
Investor optimism around the U.S. regulatory environment helped support the market, particularly after the Securities and Exchange Commission announced a five-year exemption related to certain blockchain-based stock offerings.
The announcement helped offset some disappointment surrounding the failure of the CLARITY Act to advance through Congress.
Ethereum, XRP and Major Altcoins Gain
Ether, the world’s second-largest cryptocurrency, rose around 0.4% to $2,687.72.
XRP performed more strongly, climbing approximately 3.2% to $1.5470.
BNB gained about 1.7%, while Solana advanced 2% and Cardano climbed roughly 4.7%.
Memecoins also moved higher. Dogecoin gained around 3.7%, while the TRUMP token rose approximately 7.2%.
Bitcoin Faces Competing Market Forces
Bitcoin is currently being influenced by two opposing forces.
On one side, stronger U.S. regulatory support and improving sentiment toward digital assets are helping sustain demand for cryptocurrencies.
On the other, elevated bond yields, higher oil prices and expectations for tighter Federal Reserve policy continue to weigh on risk appetite.
As long as Treasury yields remain elevated and markets expect further rate hikes, Bitcoin and the broader crypto market could remain sensitive to changes in inflation, economic data and Federal Reserve guidance.
