Bitcoin Tumbles Below $77K as Fed Hike Odds Surge to 74%

Bitcoin (BTC) fell below $77,000 on Thursday as investors bet on another interest-rate hike by the Federal Reserve. The world's largest cryptocurrency dropped to an intraday low of approximately $76,748.

The probability of a Fed hike surged after hot inflation data was released. The U.S. Producer Price Index showed wholesale inflation rising 5.4% year over year in August, slightly above the 5.3% consensus estimate. Traders increased their bets that the Federal Reserve would raise interest rates by at least 25 basis points at its September 16 meeting.

The CME FedWatch tool showed the probability of a hike climbing to around 70%, compared with approximately 64% beforehand. Other market gauges put the odds even higher, at roughly 74%. The release of Friday's Consumer Price Index report could further cement expectations of a September hike.

Soaring energy prices and rising Treasury yields are also putting pressure on Bitcoin. Brent crude surged above $100 per barrel, while U.S. crude also moved above the $100 mark. The benchmark 10-year U.S. Treasury yield climbed to approximately 4.92%, reaching its highest level since 2023.

Bitcoin's decline coincided with weakness across traditional markets. The Dow Jones Industrial Average was down around 0.7%, while the S&P 500 and Nasdaq Composite had fallen roughly 0.6%. The European Central Bank added to this backdrop by raising its key interest rates by 25 basis points.