[Bitcoin Now] 6.7% Plunge Amid US Tightening Concerns and Rising Treasury Yields... Investor Sentiment Shifts from 'Neutral' to 'Fear'

A customer visiting the Bithumb exchange in Gangnam-gu, Seoul.

The price of Bitcoin, the leading cryptocurrency, plummeted as U.S. Treasury yields rose amid concerns over additional interest rate hikes by the U.S. Federal Reserve (Fed).

According to the global cryptocurrency market tracking site CoinMarketCap, as of 10:44 a.m. on the 18th, Bitcoin was priced at $26,643 (approximately 35.59 million KRW), down 6.73% from the previous day. It had fallen to as low as $25,409 around 6:45 a.m. but later narrowed the decline.

Bitcoin prices declined due to fears of further rate hikes by the Fed. The minutes of the July Federal Open Market Committee (FOMC) meeting, released the day before, revealed that Fed officials expressed significant concerns about inflation and left room for additional interest rate increases.

The minutes stated, "Most participants acknowledged that inflation remains significantly above the price stability target and that there are significant upside inflation risks in a tight labor market," adding, "This may require additional tightening of monetary policy."

The rise in Treasury yields also contributed to the drop in Bitcoin prices. In the New York bond market, the benchmark 10-year yield continued its upward trend, hitting the highest level in 15 years and rising above 4.3% during the previous trading session. The U.S. Treasury's increased issuance of bonds also exerted upward pressure on yields. With U.S. Treasuries, essentially risk-free assets, offering interest rates above 4% annually, funds are flowing out of the cryptocurrency market.

Investor sentiment in the cryptocurrency market worsened to fear levels. According to cryptocurrency data provider Alternative, the Fear & Greed Index, which measures investor sentiment, dropped 13 points from 50 (neutral) the previous day to 37 (fear). Alternative’s Fear & Greed Index ranges from 0, indicating extreme fear and pessimism about investing, to 100, indicating optimism.