Bitcoin Struggles to Maintain $26K Amidst Escalating Interest Rates
Rising yields are exerting pressure on conventional assets, evident in the Nasdaq's decline by another 1%, marking its lowest point since early June.
Bitcoin (BTC) is grappling with the effects, maintaining a position around $26,200 on Tuesday, as the notion of prolonged higher interest rates gains traction across financial markets. The broader Bitsday Market Index (BMI) is showing a 0.6% dip, slightly trailing behind the decline observed in bitcoin.
The U.S. 10-year Treasury yield has surged to 4.55%, aligning with its highest level in approximately 16 years. To provide context, the yield on the 10-year note started September at a mere 4.18%.
This sharp elevation in rates is significantly impacting the stock markets. The Nasdaq experienced a 1.1% drop on Tuesday, reaching its most vulnerable point in almost four months. Similarly, the S&P 500 recorded a similar decline, aligning with levels not witnessed since early June.
JPMorgan's CEO, Jamie Dimon, Sounds a Cautionary Note on Rates
Earlier on Tuesday, Jamie Dimon, the CEO of JPMorgan, expressed uncertainty about the world's readiness for a 7% rate. He pointed out that the ascent of the U.S. Federal Reserve's benchmark fed funds rate from 0% to 2% was relatively uneventful. However, the jump from 2% to the present 5.25%-5.50% took some by surprise. Dimon underscored that an ascent to 7% is a scenario that very few market participants are prepared for.
"There will be stress in the system," and warned of the potential of pushing the U.S. economy into a recession.