Bitcoin fell on Monday, extending losses from the weekend, as higher Treasury yields and the lack of progress toward a U.S.-Iran peace deal dampened investor appetite for high-risk markets.
The world's largest cryptocurrency fell 1.70% to $83,061.40 by 9:30 a.m. Bitcoin had posted gains for two consecutive weeks amid optimism about favorable U.S. regulations.
Prices for the broader cryptocurrency market also declined on Monday, following two weeks of gains.
High yields and Iranian tensions dampen appetite for cryptocurrencies
Government bond yields rose globally as markets anticipated further interest rate hikes to combat soaring inflation. The yield on the benchmark 10-year US Treasury note surpassed 5%, a level not seen since 2007, while Japanese bond yields reached their highest point in 30 years.
This sharp rise in yields was driven primarily by the growing conviction that the world’s major central banks would continue their hawkish monetary policy approach, following the September interest rate hikes.
Both the US Federal Reserve and the Bank of Japan raised interest rates in September and indicated they might take similar steps in the future due to persistent inflation concerns. Higher interest rates are generally negative for speculative, non-yielding assets like cryptocurrencies, as they restrict market liquidity and make government debt appear safer and more attractive.
High energy costs, resulting from the US-Iran conflict, were one of the main drivers of inflation this year.
This conflict has also put pressure on high-risk markets, given the continued stalemate between the United States and Iran over the Strait of Hormuz.
US President Donald Trump did not rule out the possibility of launching further military operations against Iran in an interview he gave over the weekend, after previously rejecting a peace offer made by Tehran.
Despite the ongoing negotiations between the two sides, there appears to be little progress towards reaching a tangible peace agreement.
The ongoing clashes between the Iranian-backed Houthis in Yemen and Saudi Arabia have also contributed to supporting oil prices, keeping concerns about energy-related inflation high.
Cryptocurrency prices today: Altcoins decline following Bitcoin's move
Prices of the broader cryptocurrency market declined on Monday, weighed down by Bitcoin's losses, as the sector experienced a wave of profit-taking after two weeks of gains.
Ether, the world's second-largest cryptocurrency, fell 2.00% to $2,652.25.
XRP fell by 2.70%, Solana by 2.10%, and Cardano by 3.50%. BNB also declined by 1.30%.
As for the meme currency category, Dogecoin fell by 3.80%, and $TRUMP dropped by 4.40%.
