Bitcoin Tumbles Below $80k as Rate Hike Bets and Oil Surge Weigh
Bitcoin's price slipped below $80,000 on Monday as investors grew cautious about potential Federal Reserve rate hikes and escalating tensions in the Middle East. The cryptocurrency had reached a high of over three months ago but retreated after Friday's stronger-than-expected US jobs data revived bets on an interest-rate hike this month.
The data showed that US employers added 162,000 jobs in August, nearly triple economists' expectations, while the unemployment rate held at 4.1%. This pushed markets to price a roughly 60% probability of a Fed rate increase at the Sept. 15-16 meeting, up from 49% before the data.
Higher interest rates tend to weigh on Bitcoin and other speculative assets by raising the opportunity cost of holding non-yielding investments and tightening financial conditions. Oil prices have added another source of uncertainty, with crude oil reaching around $97 a barrel on Monday as military tensions between the US and Iran raised concerns over supply disruptions in the Middle East.
Despite the recent pullback, institutional demand has provided some support, with US spot Bitcoin exchange-traded funds recording about $1 billion in net inflows last week. However, investors are now turning to US inflation data for further clues on the Fed's policy path, with producer prices due on Thursday and consumer prices on Friday.