Bitcoin Falls as Markets Price in Four More Fed Rate Hikes

Markets are pricing in tighter monetary policy for longer as Bitcoin falls below $83,000. According to CME FedWatch data cited by CoinDesk, a Fed rate range one percentage point above the current level is expected for June 2027, suggesting a total of 100 basis points equivalent to four 25-basis-point hikes.

This does not mean the Fed has announced that it will raise rates at four meetings; it reflects market pricing for future interest rates. The current rate range is 3.75%, 4%, and reaching a 4.75%, 5% level by June 2027 would amount to 100 basis points.

Bond yields are also putting pressure on Bitcoin, with the 10-year U.S. Treasury yield above 5.1% and the 20-year yield close to 5.5%. The dollar index has risen above 101, up 3% year to date, while Bitcoin has fallen from a recent high of about $87,500.

The factors driving rate expectations include strong growth, inflation uncertainty, and rising capital needs. Heavy borrowing to finance AI infrastructure is increasing bond issuance, which competes with U.S. Treasury bonds for investors' money.