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Bitcoin dips as U.S.-Iran escalation lifts oil and rate-hike bets
Brent crude rose nearly 4% over the past day, helping push the two-year Treasury yield to 4.28% and weigh on the so-called rate-hike trade for bitcoin.
CoinDesk reports that bitcoin fell over the past 24 hours to about $62,600, as traders pulled back from risk amid inflation concerns tied to higher oil prices following renewed U.S.-Iran hostilities.
Brent crude rose nearly 4% in the same period, with the conflict disrupting tanker traffic through the Strait of Hormuz, a route that previously carried about one-fifth of global oil and gas supplies and has been de-facto closed for 136 days. The resurgence is also reviving the so-called Nacho trade, which bets on the strategic waterway staying shut.
CoinDesk also points to broader market moves, with the CoinDesk 20 index down 0.6% and European equity benchmarks down about 1%, while U.S. index futures fell 0.3%. Perceived odds of Hormuz reopening by year-end dropped from 65% to 56%, and traders see next to no chance of reopening by month-end.
The newsletter links higher oil to near-term inflation risk and less appetite for rate-sensitive assets, pushing the two-year Treasury yield to 4.28%. It also notes that June CPI, due later today, is the next test for inflation, with headline inflation expected to slow to 3.8% from 4.2% year over year and core inflation forecast to hold at 2.9%.
Latest closeWTI crude $86.80 ▲3.8%|Brent $90.12 ▲1.2%|Bitcoin $62,614.96 ▼1.4%