Warsh Hawks Fed into Higher Yields, Lowering BTC to $77K

Bitcoin fell below $77,000 after Federal Reserve Chair Kevin Warsh reinforced the possibility of further interest-rate increases in his Jackson Hole speech.

The move reversed part of Bitcoin's recent rally toward $80,000 and came as traders rapidly repriced the September Fed meeting. Rate futures pushed the probability of a 25-basis-point hike to 55.7%, up from 35.4% before Warsh spoke, according to Reuters.

The clearest market reaction appeared in short-term bonds, with the 2-year Treasury yield rising to about 4.31%. This increase in yields makes relatively low-risk government debt more attractive, reducing the appeal of non-yielding and higher-volatility assets like Bitcoin.

Institutional buying has not disappeared, with U.S. spot Bitcoin ETFs taking in another $242.3 million on August 27, extending their inflow streak to nine sessions and bringing the run to approximately $3.04 billion, according to fresh ETF flows.