Bitcoin Tumbles Below $77K as Fed Hike Odds Soar
Bitcoin dipped below $77K on Thursday as expectations of another Federal Reserve interest-rate hike surged after hot inflation data. The world's largest cryptocurrency hit an intraday low of roughly $76,748.
The Producer Price Index showed wholesale inflation remaining hotter than economists had hoped, with a 5.4% year-over-year increase in August, slightly above the 5.3% consensus estimate. The monthly increase came in at 0.4%, further cementing expectations of a September hike.
According to the CME FedWatch tool, the probability of a hike climbed to roughly 70% following the PPI report, compared with around 64% beforehand. Other market gauges put the odds even higher, at approximately 74%. Markets are now eyeing Friday's Consumer Price Index report.
The surge in oil prices also reignited inflation fears, with Brent crude and U.S. crude both moving above $100 per barrel on Thursday. Treasury yields have become another major headwind, with the benchmark 10-year U.S. Treasury yield climbing to approximately 4.92% on Thursday, its highest level since 2023.
Bitcoin's decline coincided with weakness across traditional markets, including a 0.7% drop in the Dow Jones Industrial Average and roughly 0.6% falls in the S&P 500 and Nasdaq Composite.