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Bitcoin Struggles to Maintain $26K Amidst Escalating Interest Rates

Sep 28, 2023 at 12:59 pm

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.

He remarked:

 "There will be stress in the system," and warned of the potential of pushing the U.S. economy into a recession.

Read more: Crypto Limits at Chase UK: Safeguarding Transactions

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