Bitcoin dips below $78k amid Iran escalation, rate jitters

Bitcoin edged lower on Monday, pressured by hawkish comments from Federal Reserve Chair Kevin Warsh, which pushed up expectations for rising interest rates, and renewed military action between the U.S. and Iran, which sent oil prices surging.

Bitcoin fell 1.3% to $77,915.1 by 09:51 ET (13:51 GMT). The world’s largest crypto hit an intraday low of $77,000.0. 

Still, Bitcoin was set to add nearly 24% in August after a major rebound rally in recent weeks. 

Warsh comments push up rate hike bets 

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 Fed will raise rates by 25 basis points in September, CME Fedwatch showed. 

Still, key nonfarm payrolls data due later this week is expected to offer more direct cues on the central bank’s plans for rates. 

Higher rates bode poorly for speculative assets like Bitcoin and cryptocurrencies. The sector’s rally in August was fueled chiefly by a sharp drop in Treasury yields following bond market intervention by the U.S. Treasury. 

U.S.-Iran military escalation weighs 

Crypto markets, in tandem with broader risk-driven assets, were spooked by renewed U.S.-Iran military 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.

Adding to uncertainty over Iran, U.S. President Donald Trump threatened to attack Iran’s key oil exporting hub, Kharg island. Treasury Secretary Scott Bessent also flagged plans for more economic sanctions on Tehran. 

Strategy resumes Bitcoin buying after 2-month pause

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.

Michael Saylor’s Strategy now holds a total of 845,050 bitcoin, acquired for $63.73 billion at an average price of $75,412 per coin.

Crypto price today: altcoins slip but head for bumper August

Broader crypto prices edged lower on Monday, but like Bitcoin, were headed for a strong performance in August. 

World no.2 crypto Ether fell 1.5% to $2,439.27, and was up nearly 31% in August.