Bitcoin Slumps Below $77K as Oil Prices Surge and Treasury Yields Rise

Bitcoin plummeted below $77,000 on Tuesday evening as renewed U.S.-Iran fighting pushed oil sharply higher, intensifying a broader risk-off move across financial markets.

The spike in oil prices and Treasury yields is proving to be a challenge for crypto markets. Brent crude surged into the mid-$90s, with Reuters reporting it at $93.93 earlier Tuesday, while other late-session market reports put it above $94.

The 10-year U.S. Treasury yield rose to roughly 4.79%, adding to inflation concerns and strengthening expectations that the Federal Reserve could remain restrictive. This combination is particularly difficult for crypto, as higher yields increase the opportunity cost of holding non-yielding assets such as Bitcoin, while a stronger inflation backdrop can reduce expectations for easier monetary policy.

Despite the selloff, U.S. spot Bitcoin ETFs attracted roughly $217 million on Aug. 31, reversing the previous session's outflow. However, the buying has not been enough to prevent volatility, with Bitcoin briefly climbing above $81,000 during August before retreating toward $78,500 at the end of the month.