Bitcoin slips to $83k amid pressure from high yields, Iran tensions

Bitcoin slipped on Monday, extending losses from over the weekend as surging Treasury yields and few signs of progress towards a U.S.-Iran peace deal dented appetite for risk-driven markets.

The world’s largest crypto fell 1.7% to $83,418 by 09:25 ET. Bitcoin clocked two straight weeks of gains on some optimism over favorable U.S. regulations. 

Broader crypto prices also fell on Monday after two weeks of gains. 

Surging yields, Iran tensions quash crypto appetite 

Government bond yields rose across the globe as markets bet on more interest rate hikes to stave off rising inflation. The 10-year U.S. Treasury yield jumped past 5% to levels last seen in 2007, while yields in Japan blew past 30-year peaks. 

The spike in yields was driven chiefly by growing conviction that the world’s biggest central banks will remain hawkish after a series of rate hikes in September. 

Both the Federal Reserve and the Bank of Japan hiked rates in September and signaled more such moves due to concerns over sticky inflation. Higher rates bode poorly for speculative, non-yielding assets like crypto, given that they limit market liquidity and make government debt appear safer and more attractive. 

Rising energy costs, stemming from the U.S.-Iran conflict, were a major driver of inflation this year. 

The conflict was also a pain point for risk-driven markets, as the U.S. and Iran remained at an impasse over the Strait of Hormuz. 

U.S. President Donald Trump did not rule out the potential for more military action against Iran in a weekend interview, after earlier rejecting a peace deal from Tehran. 

While negotiations between both sides remained ongoing, there appeared to be little progress towards a concrete peace deal. 

Continued hostilities between Yemen’s Iran-backed Houthis and Saudi Arabia also underpinned oil, keeping fears of energy-driven inflation high.