On the Chain: Bitcoin slides below US$85,000 as rising yields hit crypto

Bitcoin has retreated below US$85,000, giving back part of this week’s sharp rally as rising US bond yields, renewed interest rate concerns and geopolitical uncertainty triggered profit-taking across the cryptocurrency market.

The world’s largest digital asset was recently trading around US$84,000, down roughly 3% over 24 hours after reaching an intraday high above US$87,000.

The pullback comes just days after Bitcoin touched an eight-month high of around US$87,350, following gains of more than 8% during September and a 25% advance in August.

Rising yields pressure risk assets

The latest selling coincides with another rise in US Treasury yields.

The benchmark 10-year Treasury yield has climbed to its highest level since 2007 as markets price in the possibility of another US Federal Reserve interest rate increase.

Higher bond yields typically increase the opportunity cost of holding non-yielding assets such as Bitcoin and can weigh on speculative investments more broadly.

Bitcoin's failure to break decisively through the US$87,000 area also encouraged traders to lock in profits following the rapid rebound from below US$80,000 last week.

Geopolitical uncertainty is providing another source of volatility, with developments surrounding Iran, oil supplies and the Strait of Hormuz feeding concerns that energy prices could keep global inflation elevated.