Bitcoin August Rally Is Being Put to the Test With Higher Treasury Yields

Bitcoin fell to $77,500 today, unwinding part of the nearly 25% August’s gain. It happens as renewed U.S.-Iran strikes and a fresh leg higher in Treasury yields rekindled bets on a Federal Reserve rate hike this month.

The reversal poses a direct test of whether August’s rally was a durable shift in Bitcoin’s macro positioning or simply a byproduct of falling yields that has now gone into reverse.

JUST IN: 🇺🇸🇮🇷 Brent Crue Oil surges over $95 as US launches strikes on Iran. — Watcher.Guru (@WatcherGuru)

The U.S. and Iran traded a fresh round of strikes overnight Tuesday, with both sides digging in over control of the Strait of Hormuz. President Donald Trump threatened to hit Iran’s oil infrastructure directly, while Tehran warned of further retaliation against U.S. bases in the surrounding Gulf countries.

Oil prices jumped sharply on the escalation, marking the worst U.S.-Iran hostilities in over a month and reviving worries about energy-driven inflation spreading through the global economy. Government bond yields surged in response across Japan, Australia, the U.S., and Europe, and markets moved quickly to price in a higher probability that the Federal Reserve would raise rates at its September meeting. Right now, inflation is still running above the central bank’s 2% annual target.