Bitcoin pares losses, remains flat

Broader cryptocurrency prices also pulled back from declines, and were largely sitting on weekly gains on the back of a rally on Monday

Bitcoin pared some losses on Thursday to trade flat, as risk sentiment remained under pressure from a combination of spiking oil prices, soaring Treasury yields, and U.S. central bank rate hike expectations.

Broader cryptocurrency prices also pulled back from declines, and were largely sitting on weekly gains on the back of a rally on Monday.

Bitcoin was unchanged at $84,420.2 by 21:53 GMT. The world’s largest crypto was still sitting on strong gains so far in September, as investors welcomed more regulatory favour.

Bitcoin’s earlier losses came in tandem with broader risk-driven markets, which dropped amid a sharp surge in Treasury yields.

The U.S. 10-year benchmark jumped back above 5% and to its strongest level since 2007, as robust U.S. purchasing managers index data and hawkish comments from a central bank Governor ramped up bets on more rate hikes in the coming months.

The central bank raised rates by 25 basis points last week and reiterated its commitment to a 2% annual inflation target, which markets interpreted as heralding more rate hikes.

Bond yields surged across some countries on expectations of more rate hikes. Japanese 10-year yields hit a 30-year high on Thursday.

Higher rates diminish the appeal of risky, speculative investments like Bitcoin, given that debt usually offers better returns in such environments.

Adding to concerns over higher rates, oil prices extended its surge on Thursday as hopes of diplomatic progress between Iran and U.S. faded.

Oil’s surge was fuelled by a strongly worded address by Iranian President Masoud Pezeshkian at the United Nations General Assembly in New York City on Wednesday, where he took aim at the U.S.