Bitcoin Falls Below $27K as Investors Worry About Global Economy

Bitcoin Falls Below $27K as Investors Worry About Global Economy

On Wednesday, the U.S. 10-year Treasury yield continued its upward trend, increasing by nine basis points to reach a new 16-year high of 4.63%.

The price of Bitcoin (BTC) seemed poised to reclaim the $27,000 level early on Wednesday, but the upward momentum was halted amid a renewed decline in the U.S. stock market.

During the mid-afternoon trading session, both the S&P 500 and Nasdaq experienced modest declines of approximately 0.6%. While individually these declines may not appear significant, it’s worth noting that both indexes have now retreated by about 10% since the beginning of August.

As for Bitcoin, it remained relatively stable over the past 24 hours, hovering just below the $26,200 mark. Earlier in the day, it had shown promise by surpassing $26,800. The CoinDesk Market Index (CMI) recorded a marginal increase of 0.15%.

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While interest rates continue to rise, which might typically suggest downward pressure on Bitcoin’s price, some argue that the usual relationship between interest rates and Bitcoin is evolving. Others see a bullish case for Bitcoin, emphasizing its technical aspects.

During a recent appearance on CoinDesk TV, Mark Yusko, the Chief Investment Officer of Morgan Creek Capital Management, highlighted the significance of the next Bitcoin halving event, which occurs every four years. He described it as a transition in the “seasons” of Bitcoin.

“Crypto summer started in June and goes till next June. And that is a slow but steady increase back to fair value,” he said. “We start with the halving, pushing us from summer to fall. That’s the parabolic time when people go crazy and buy with leverage.”

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On the same day, equity markets saw a decline as the 10-year Treasury yield surged by another nine basis points, reaching a new 16-year high at 4.63%. Alongside the rising interest rates, the price of oil also increased by over 3.5%, reaching a new high for 2023 at $93.53 per barrel. This scenario has led to the revival of the term “stagflation,” suggesting a combination of slow economic growth and fast inflation.

Interestingly, a Wall Street Journal survey revealed that 41% of U.S. chief financial officers (CFOs) are considering reductions in capital spending plans, while 42% are looking to cut operational costs in response to the rising interest rates. This indicates a shift in corporate strategies, as a survey conducted in the fourth quarter of 2022 showed that only 30% were planning to reduce capital spending, and 27% were considering trimming operational costs.

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John Smith

John Smith is a distinguished journalist, holding a Master's in Journalism from the renowned Columbia University. With a knack for uncovering the most captivating stories, John is the go-to expert for all things related to politics and current affairs. His insightful analysis and commitment to unbiased reporting set him apart in the world of journalism. John's writing ensures you're always in the know about the latest happenings in the USA.

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