“When you throw in what is happening in the bond market, it becomes easy for Bitcoin prices to soften,” Edward Moya, senior market analyst at Oanda, said in a note.
The slide has almost erased most of the gains registered in the wake of BlackRock’s surprise filing for an Bitcoin ETF on June 15. After surging 72% in the first quarter, Bitcoin has declined about 9% since the end of March. The token tumbled 64% last year amid a series of industry scandals and bankruptcies.
The largest digital asset by market value fell around 9% to $26,338 as of 5:55 p.m. in New York. Bitcoin briefly touched $25,314, the lowest price since June 16.
“There aren’t enough good headlines coming out of crypto to get people excited,” said Michael Safai, partner at quantitative trading firm Dexterity Capital. “Conversely, rising interest rates and weakened risk appetite are pushing non-crypto-native traders towards safer assets.”
Other cryptocurrencies were down more, with Ether down about 6% and Cardano and Solana’s tokens erasing earlier gains.
The rise in global yields comes as resilient economic data challenges the view that central banks rates are peaking. Higher interest rates generally lessen the appeal of alternative investments such as cryptocurrencies.
The drop in Bitcoin follows a period in which the cryptocurrency has been trading in a narrow range for months. Gauges that measure the price swings of the original cryptocurrency have been trending down, with 90-day volatility reaching its lowest since 2016 this week, according to data compiled by Bloomberg.
“There was optimism earlier in the week that a resolution to the Grayscale Bitcoin ETF would come this week but that passed with nothing coming out,” Shiliang Tang, chief investment officer at crypto investment firm LedgerPrime, said. “Furthermore traditional markets have been weak all week with SPX and tech selling off, 10-year rates reaching highs and the dollar catching a bid, and China credit and econ data weakness, all of which are negatives for risk assets.”
