Ongoing tensions in the Middle East continue to drive international oil prices higher, while surging U.S. Treasury yields are further dampening risk appetite in the cryptocurrency market.
On October 8, Bitcoin fell as low as $82,300.5, marking its lowest level in nearly three weeks.
As of 17:09 Beijing time, Bitcoin was down about 1% at $83,152.4.
Ethereum, Solana, and XRP also declined in tandem.
Even though Strategy, the largest corporate holder of Bitcoin, continued to increase its holdings this week, it was unable to reverse the market's downward trend.
Middle East Conflict Pushes Oil Higher, Inflation Fears Hit Risk Assets Again
Bitcoin has been under sustained pressure recently, mainly due to the combined impact of escalating Middle East conflicts, rising energy prices, and expectations of tighter global monetary policy.
On October 8, reports emerged that the United States is considering another military action against Iran, driving international oil prices sharply higher.
At the same time, Iran has intensified attacks on shipping in the Strait of Hormuz over the past week, reducing vessel traffic through this critical energy transport corridor to its lowest level in more than two months.
As shipping disruptions in the Strait of Hormuz continue, market concerns about a global oil supply disruption have intensified further, extending the previous rally in international oil prices.
The sustained rise in oil prices has also reignited concerns about energy-driven inflation.
Investors worry that if energy costs remain elevated for an extended period, inflation in major economies could rise further, forcing the Federal Reserve and other major central banks to maintain tight monetary policy or even take further tightening measures.
This expectation is putting pressure on high-risk assets, including cryptocurrencies.
U.S. Treasury Yields Hit 24-Year High, Fed's Hawkish Stance Amplifies Bitcoin Selloff
In addition to rising energy prices, the rapid climb in U.S. Treasury yields has become another important factor weighing on Bitcoin's performance.
The minutes of the Federal Reserve's September monetary policy meeting released overnight showed that policymakers have adopted an overall hawkish stance in the face of rising inflationary pressures.
As a result, U.S. Treasury yields rose further, with the benchmark 10-year Treasury yield hitting a 24-year high on Wednesday.
For assets like Bitcoin that do not generate fixed interest income, rising Treasury yields mean an increase in the opportunity cost of holding these assets.
As U.S. Treasuries offer higher yields, investors' willingness to allocate to volatile, higher-risk cryptocurrencies weakens accordingly.
Previously, the cryptocurrency market experienced a sustained rally in the third quarter, and some investors began taking profits.
The shift toward an unfavorable macroeconomic environment has further intensified this round of corrective pressure.
It is worth noting that even though Strategy continued buying Bitcoin this week, it failed to stop the price decline, indicating that buying from large corporate accumulation is not yet sufficient to offset overall market selling pressure.
Cryptocurrencies Fall Broadly, Solana Drops Over 2% Despite Samsung Pay Partnership
Bitcoin's decline dragged the entire cryptocurrency market lower.
As of 17:09 Beijing time on October 8, Ethereum fell 1.2% to $2,566.85; XRP dropped 2.8%; Cardano fell 1%; and BNB edged down 0.2%.
Solana's token fell about 2.2% over the same period, even though its blockchain ecosystem had just announced a new payment partnership.
On the evening of October 7, Solana announced a partnership with Samsung, under which Samsung Wallet and Samsung Pay will support stablecoin transactions through the Solana network.
Under the arrangement, starting in late October, Samsung Wallet users in the United States will be able to use the U.S. dollar stablecoin USDC for cross-border transactions.
This partnership further expands Solana's applications in traditional finance and stablecoin payments.
Previously, PayPal and Western Union had already used the Solana network for related stablecoin business.
However, this business development failed to offset macroeconomic market pressure, and Solana's token price still fell along with other major cryptocurrencies.
Among other crypto assets, Dogecoin fell 1.8%, while the Trump-themed token TRUMP edged up 0.4%.
Currently, the main pressure on the cryptocurrency market still comes from the macroeconomic environment.
Middle East tensions are driving oil prices higher, energy inflation concerns are prompting the market to reassess the Fed's policy outlook, and persistently rising Treasury yields are further weakening the appeal of high-risk assets.
Against this backdrop, even if some cryptocurrencies receive corporate accumulation or positive business partnership news, short-term price performance remains constrained by overall market risk appetite.
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