The crypto was headed for a monthly surge of more than 25%
Bitcoin edged slightly higher on Monday, with gains capped by hawkish comments from U.S. central bank Chair Kevin Warsh. Risk sentiment in general was muted after a sharp escalation in tensions between Iran and the U.S.
Bitcoin added 0.5% to $79,038.3 by 21:44 GMT. The crypto was headed for a monthly surge of more than 25%.
Warsh, speaking at the Jackson Hole economic symposium on Friday, said the central bank remained committed to its 2% annual inflation target.
While he did not explicitly mention any plans to hike interest rates, Warsh’s comments were widely viewed as hawkish, with markets ratcheting up bets that the central bank will hike interest rates by as soon as September.
Traders are pricing in a 60.4% chance the central bank will raise rates by 25 basis points in September, CME Fedwatch showed.
Higher rates bode poorly for speculative assets like cryptocurrencies. The sector’s rally in August was fuelled chiefly by a sharp drop in Treasury yields following bond market intervention by the U.S. Treasury.
Crypto markets, in tandem with broader risk-driven assets, were spooked by renewed Iran-U.S. action. The two sides exchanged strikes on Sunday, their first such move in over a month.
Oil prices rose sharply on the development, adding to concerns over higher inflation and interest rates.
Meanwhile, Strategy made its first Bitcoin purchase since late June, acquiring 4,603 coins for $369.7 million last week at an average price of $80,318 each, the company said in a Monday morning press release.
The purchase was funded through the sale of $602.8 million in common stock. The remaining proceeds were directed toward $151.8 million in buybacks of the company’s STRC preferred shares, with the rest added to cash reserves.
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