Bitcoin Defies Expectations at $79,000 Amid Rising Inflation and Interest Rate Risks

Bitcoin is defying expectations by holding at $79,276.76 despite rising inflation and interest rate risks. The price is up 0.94% on the session, with market capitalization sitting near $1.33 trillion.

The interesting aspect of this situation is not the number itself but that it exists at all. Other assets are behaving as expected: oil has cleared $100 a barrel for the first time since late July, and the 10-year Treasury yield sits at 4.780%, a two-decade high.

However, Bitcoin's price action is more closely tied to inflation-through-debasement than inflation-through-rates. The Treasury is buying yen to prevent the Bank of Japan from liquidating its $1.1 trillion Treasury position, and this has sparked a buyback operation of at least $4 billion in 10- and 20-year notes.

As a result, Bitcoin's price is up despite being a non-yielding, risk-sensitive asset that should be printing new lows under these conditions.