Bitcoin rose on Tuesday, holding near its recent highs, after Strategy Associates, the cryptocurrency’s largest institutional holder, resumed buying for the first time in two months.
However, gains in cryptocurrency markets were limited by continued caution over rising interest rates and escalating tensions between the United States and Iran.
Bitcoin rose 1.2% to $79,015.30 by 9:13 a.m., following gains of more than 25% during August, driven by hopes of progress on US regulation and increased demand for alternative assets amid the turmoil in the bond market.
Interest rate concerns and tensions with Iran are curbing cryptocurrency gains.
Uncertainty over US interest rates continues to cast a shadow over the markets, particularly after Federal Reserve Chairman Kevin Warsh’s hawkish remarks, which prompted markets to raise their expectations for an interest rate hike in September.
Warsh had reaffirmed the Fed's commitment to its 2% annual inflation target, fueling expectations that the central bank would be forced to raise interest rates. Recent turmoil in the bond market also contributed to these expectations.
On the geopolitical front, markets remained on edge regarding escalating tensions between the United States and Iran, following the exchange of military strikes between the two sides for the first time in a month.
This led to a sharp jump in oil prices, especially after shipping data revealed that traffic through the Strait of Hormuz remained at a low level compared to what it was before the outbreak of the war.
The rise in oil prices, in turn, sparked new concerns about inflation and interest rates.
High interest rates are a negative factor for Bitcoin, as they reduce the attractiveness of investing in highly speculative assets compared to debt instruments.
Strategy buys Bitcoin for the first time in two months
Strategy Inc (NASDAQ:MSTR), the world’s largest institutional Bitcoin treasury, revealed on Monday that it purchased 4,603 coins worth approximately $368.70 million during the past week.
This transaction represents Strategy's first Bitcoin purchase since late June, and was funded through the sale of $602.80 million in common stock, with the remaining proceeds directed towards repurchasing the company's STRC preferred shares.
The latest purchase brings Strategy's total Bitcoin holdings to 845,050 coins.
Cryptocurrency prices today: Altcoins move higher after a strong August.
Cryptocurrency prices rose across the board on Tuesday, extending exceptional gains made during August.
Ether, the world's second-largest cryptocurrency, rose 1.5% to $2,476.01, while XRP increased by 1.8%.
Solana and Cardano each added gains of 1.2% and 3% respectively, while BNB rose by 0.6%.
The meme-type cryptocurrencies Dogecoin and $TRUMP both recorded gains of over 1% each.
