Bitcoin’s rebound from last week’s lows is falling and gold is falling with it.
BTC changed hands at $61,233 on Wednesday, down 3% in 24 hours and down 6.9% for the week, while gold fell 2% to below $4,200 an ounce. The market is betting that higher interest rates will punish anything that doesn’t pay, and that’s weighing on the cryptocurrency and gold markets at the same time.
Ether fell 3.4% to $1,625 and solana fell 4.1% to $64.24, according to data from CoinDesk. XRP lost 4.3% to $1.12, while BNB and dogecoin fell less than 3% each. Hyperliquid HYPE was again the worst of the majors, falling 10.2% on the day and 21.3% on the week to $55.52, the name with the highest beta of the group when risk decreased.
South Korea’s Kospi, the market most exposed to AI trading through its chipmakers, fell 6.3%, leading a 2.5% drop in MSCI’s broad Asia-Pacific stock gauge and its fourth loss in five days. Nasdaq 100 futures pointed 0.8% lower after a volatile session on Wall Street. Brent crude was trading near $92 a barrel as renewed US attacks on Iran kept supply below oil and the 10-year Treasury yield rose to 4.54%.
Gold and bitcoin rarely fall at the same time, as they are both stores of value that pay no yield, so they both lose their appeal when traders bet on higher rates, and that’s what could force Wednesday’s US inflation report.
A positive reading would strengthen the case for new Federal Reserve Chairman Kevin Warsh to keep rates higher for longer, draining liquidity from assets most reliant on cheap money.
Monday’s bounce was a brief squeeze, not new buying, as more than $500 million in bearish bets were liquidated, the most since April.
Some market watchers say spot demand never appeared behind this.
“Buyers have stepped in after the move lower, but spot demand has yet to return in any meaningful way,” said Diana Pires, chief trading officer at sFOX, pointing to a series of outflows from U.S. spot bitcoin ETFs that have kept institutional money cautious. When new demand is not large enough to cover sales, he said, rallies struggle to sustain.
Watch to see if Bitcoin can maintain a bid through inflation or continues to trade tick after tick with the Nasdaq. If gold stabilizes and bitcoin continues to fall, the arguments in favor of its use as a macro hedge become even smaller.
