Bitcoin Below $84,000 as High Treasury Yields Weigh — Update
By Joseph Wilkins
Bitcoin traded below $84,000 on Thursday, giving up gains from a spike in response to cooler-than-expected inflation data, as stubbornly high U.S. Treasury yields weigh on risk assets.
The flagship cryptocurrency was 0.3% higher at $83,904 on Thursday. Bitcoin had briefly spiked above $85,000 on Wednesday--fueled by a positive reaction to the Federal Reserve's latest inflation figures--before reversing gains as Treasury yields hit fresh multidecade highs.
Meanwhile, the dollar rose to three-month high against a basket of currencies on Thursday, which tends to pressure risk assets including crypto.
The Federal Reserve's preferred inflation gauge showed a significant slowdown in price increases over the 12 months through August on Wednesday. A softer-than-expected inflation reading tends to temper investor expectations for further interest-rate hikes, boosting risk assets. But bitcoin's bounce was short-lived as the 10-year Treasury yield hit its highest level since May 2002, at 5.304%.
Citi boosted its 12-month bitcoin target price to $113,000 from $82,000 amid renewed investor concern that high government deficits could erode the value of fiat currencies, along with regulatory uncertainty. "Paradoxically, the failure of the Clarity Act which spurred agency rulemaking, helped crypto regain technical levels," the analysts wrote. Citi added that exchange-traded fund inflows should be relatively sticky and consistent as investors gradually adopt bitcoin into portfolios.
Flows into cryptocurrency funds remain subdued this week, with J.P. Morgan estimating that week-to-date flows into crypto exchange-traded products total just $123 million so far. Last week clocked the biggest inflows recorded all year, at over $3.2 billion.
Institutional flows matter because leverage has already been reduced across derivatives markets, Zaye Capital Markets Chief Investment Officer Naeem Aslam wrote in a note.
"The next sustainable move increasingly depends on real spot demand rather than speculative positioning alone," he added.
Write to Joseph Wilkins at joseph.wilkins@wsj.com
(END) Dow Jones Newswires
October 01, 2026 09:00 ET (13:00 GMT)
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