Bitcoin falls on US PPI overshoot as 30-year bond yield hits new 19-year high

Bitcoin (BTC) dipped below $77,000 around Thursday’s Wall Street open as risk assets faced resurgent macro headwinds.

Key points:

• Bitcoin saw downside on the back of higher-than-expected US PPI inflation data, which hit 5.4% in August.
• Middle East strikes sent WTI crude oil over $100 per barrel for the first time since May.
• The US 30-year bond yield shrugged off a $6 billion buyback operation to hit its highest level since June 2007.

US bond yields surge despite $6 billion intervention

Data from TradingView showed BTC/USD on track for 2% losses on the day, following weakness in US equities.

BTC/USD one-hour chart. Source: Cointelegraph/TradingView

Ongoing escalation in the Middle East fueled a fresh surge in oil prices, with WTI crude passing $100 per barrel for the first time since May 21. Brent crude passed $105 per barrel on the day, nearing a new 16-week high.

CFDs on WTI crude oil one-day chart. Source: Cointelegraph/TradingView

Against a backdrop of increasing inflation due to higher oil prices, markets also faced a fresh breakout in long-dated US bond yields. These came despite the Treasury executing the first of its stepped-up debt buyback operations and repurchasing $6 billion worth of Treasurys on Wednesday. 

The US 30-year yield reached 5.353% on the day, a level last seen in June 2007, while the 10-year yield hit its highest levels since November 2023 at 4.924%.

US 30-year bond yield one-month chart. Source: Cointelegraph/TradingView

Commenting, trading resource The Kobeissi Letter warned of knock-on effects from high borrowing costs for both government and consumers.

“The bond market is quite literally fighting the US Treasury,” it wrote in a reaction on X.

Hot US PPI data adds to crypto’s macro headache

The August print of the Producer Price Index (PPI) underscored increased inflation, coming in at 5.4% year-on-year, 0.1% higher than expected. July’s headline PPI print was likewise revised higher.

Related: Bitcoin sell-side risk returns to rare lows as $80K sellers fade from view

“The index for final demand less foods, energy, and trade services rose 0.3 percent in August after moving up 0.4 percent in July. For the 12 months ended in August, prices for final demand less foods, energy, and trade services advanced 4.7 percent,” an official news release from the US Bureau of Labor Statistics (BLS) stated.

US PPI one-month % change. Source: BLS

Market expectations of interest-rate hikes from the Federal Reserve jumped on the data. CME Group’s FedWatch Tool showed the odds of a 0.25% hike at the Fed’s Sept. 16 meeting at 69.8% at the time of writing versus 61.2% the day prior.

Fed target-rate probability comparison for September FOMC meeting (screenshot). Source: CME Group

As Cointelegraph reported, concerns over Fed policy tightening had already increased on the back of stronger nonfarm payrolls data. Friday will see the release of another key US inflation report, the Consumer Price Index (CPI), which will form the last major inflation print before the Fed rate decision.

On Thursday, the European Central Bank enacted its own 0.25% hike, the second such move in 2026.