Fed decision making comes into focus as bitcoin holds steady, bond yields surge
Bitcoin is trading within a narrow range as investors await Federal Reserve minutes, while rising bond yields and crude oil prices create a challenging environment for risk assets. Analysts note that Bitcoin is currently behaving as a liquidity-sensitive asset rather than a hedge against inflation.
Why it matters
Understanding the correlation between crypto assets and macroeconomic indicators is crucial for institutional and retail investors navigating current market volatility.
Bitcoin BTC $ 64,453.62 remains in its weeks-long $60,000 and $67,000 range in advance of today’s minutes from last month’s Federal Reserve interest-rate setting meeting.
After briefly climbing through $65,000 yesterday, the largest cryptocurrency has dropped about 0.5% since midnight UTC. The broader CoinDesk 20 ( CD20 ) index is little changed over the same period.
Softer economic data in recent weeks have reduced expectations of another Fed increase, which would normally pull bond yields lower and support risk assets, including crypto. In fact, government bonds crashed worldwide overnight, lifting yields to the highest levels in years and sending stock benchmarks lower.
The probability of no rate change in September is about 72%, according to traders on prediction market Polymarket. It’s about 67% on the CME’s Fedwatch tool.
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