Bitcoin Plunges Below $77K as Warsh Speech Sparks Hawkish Sentiment

Bitcoin's recent rally toward $80,000 was short-lived after Federal Reserve Chair Kevin Warsh's Jackson Hole speech reinforced the possibility of further interest-rate increases if inflation remains above target.

The move reversed part of Bitcoin's recent gains 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.

Hawkish comments from Warsh caused the U.S. dollar to strengthen and short-term bond yields to rise, making higher-yielding assets like Bitcoin less appealing.

Despite institutional demand remaining strong, with $242.3 million in spot ETF inflows on August 27, the macro environment has become less favorable for BTC.