Rate Hike Fears Weigh on Crypto Market as September Expectations Rise
The cryptocurrency market is facing increased pressure from potential Federal Reserve rate hikes in September. Strong US employment data, higher energy prices, and rising Treasury yields have boosted expectations for a 25-basis-point interest rate increase at the upcoming Fed meeting.
CME FedWatch data indicates a 58.4% probability of a rate hike this month, up from 52% before the latest jobs report. This would take the federal funds target range to 4%-4.25% by year-end, making government securities more attractive and reducing liquidity for risk assets.
Bitcoin has recovered to around $80,000 after a 30% rebound, but its value remains vulnerable to monetary tightening. Spot Bitcoin ETFs recorded approximately $987 million in net inflows last week, providing some support to the market.