Bitcoin steadied on Tuesday, remaining close to recent peaks after top corporate holder Strategy resumed its purchases of the cryptocurrency after two months.
But gains in crypto markets were held back by continued caution over higher interest rates and continued U.S.-Iran tensions.
Bitcoin slipped 0.3% to $78,387.3 by 10:17 ET (14:17 GMT) after adding nearly 25% in August on hopes of more progress in U.S. regulation and demand for alternative assets amid turmoil in the bond market.
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Rate jitters, Iran tensions, and weak jobs data keep crypto gains in check
Uncertainty over U.S. interest rates remained in play Tuesday, especially after hawkish comments from Federal Reserve Chair Kevin Warsh saw markets ratchet up expectations for a September rate hike. Warsh reiterated the Fed’s commitment to its 2% annual inflation target, spurring bets that the central bank will have to tighten further. Recent bond market turmoil added to those expectations.
Adding to the pressure, U.S. job openings fell short of expectations in July, according to data released Tuesday, though the figure still marked an improvement from a downwardly revised June reading. The Labor Department’s Job Openings and Labor Turnover Summary showed 7.271 million openings in July, below the 7.330 million economists had forecast, while June’s figure was revised down to 7.182 million from an initial 7.359 million.
A resilient labor market had been one of the few bright spots supporting the case for tighter Fed policy, making any sign of softening a complication for the central bank’s dual mandate. Persistent inflation paired with a cooling labor market raises the risk of a stagflationary bind — a scenario where higher rates squeeze corporate margins and hiring, even as price pressures stay elevated.
On the geopolitical front, markets remained on edge over renewed U.S.-Iran tensions after the two carried out military strikes for the first time in a month. The development sent oil prices soaring, especially as shipping data showed traffic through the Strait of Hormuz remained at a fraction of pre-war levels, adding further upward pressure on inflation expectations.
Higher rates bode poorly for Bitcoin, given that they diminish the appeal of highly speculative assets relative to debt.
Strategy buys Bitcoin for first time in 2 months
Strategy Inc (NASDAQ:MSTR), the world’s biggest corporate Bitcoin treasury, disclosed on Monday that it purchased 4,603 coins for about $368.7 million last week.
The buy marked Strategy’s first Bitcoin purchase since late-June, and was funded through the sale of $602.8 million in common stock. The remainder of its proceeds were directed towards buying back Strategy’s STRC preferred shares.
The latest purchase brings Strategy’s holdings to 845,050 Bitcoin.
Crypto price today: altcoins rangebound after bumper August
Broader crypto prices logged small moves Tuesday after clocking stellar gains in August.
World no.2 crypto Ether slipped 0.7% to $2,450.01, while XRP added 0.2%.
Solana fell 1.2%, and BNB shed 0.5%, while Cardano rose 1.2%.
Memecoins Dogecoin and $TRUMP slipped 0.3% and 2.8%, respectively.