Bitcoin Enters 'Rektember' After Best August Since 2017

Bitcoin's August rally has come to an abrupt end as the cryptocurrency fell below $77k in the first week of September. This marks a reversal from its 25% surge in August, which was its strongest month since November 2024 and the best August rally since 2017.

The decline is attributed to several headwinds, including elevated inflation concerns raised by Fed Chair Kevin Warsh during his Jackson Hole speech last Friday. The bond market responded strongly, with sovereign yields pushing to new cycle highs and the US 10-year reaching 4.784%. Markets now price a 66% chance of a 25-basis-point hike at the September 16 meeting.

Higher rates will tighten financial conditions and lift the dollar, which is typically bad news for anything on the risk end of the curve. This includes Bitcoin, traditional markets, and other assets that have performed well during the rally.