Bitcoin Slumps as Yields Soar Above 5% and Dollar Strengthens

Bitcoin's price slipped by 2% on Wednesday to $84,357 as US Treasury yields soared above 5%, reaching their highest level since 2007. The drop coincided with a planned Treasury buyback of up to $6 billion and stronger PMI/inflation data.

The increased yields are typically a headwind for Bitcoin's price, making it more expensive to hold an asset that generates no income. Higher rates also strengthen the dollar and dampen appetite for risk-on assets, leading to ETF outflows and forced leveraged selling.

Bitcoin had surged earlier in the week to nearly $87,330 as investors piled into exchange-traded funds. However, its rally has since cooled, with the price dropping further on Wednesday afternoon.