Bitcoin Fizzles Out at US$81,000 as Rate Hikes Return
Bitcoin's push above US$81,000 has fizzled out as fears of higher US interest rates resurface. The world's largest cryptocurrency fell back towards US$78,000 after Federal Reserve chair Kevin Warsh reinforced the central bank's determination to bring inflation back to its 2% target.
The rally that saw Bitcoin rise more than 20% in little over a week, helped by renewed institutional buying and a move towards alternative assets, came to an end. The attempt to establish itself above US$80,000 ran into resistance after Warsh's comments changed expectations for US monetary policy.
Traders increased bets that the Federal Reserve could raise interest rates at its September meeting, causing Bitcoin to dip below US$78,000. The US two-year Treasury yield jumped and the dollar strengthened as markets digested Warsh's message.