Bitcoin and Ethereum tumble as bond yields and geopolitical risks shake markets
Financial markets are facing renewed turbulence as rising bond yields and geopolitical tensions weigh on investor confidence. Both Japanese government bonds and US Treasury yields have climbed, signalling worries over stubborn inflation. Meanwhile, cryptocurrencies like Bitcoin and Ethereum are under pressure, with prices slipping amid shifting expectations for US monetary policy.
Bitcoin, which had seen strong gains since mid-2023, has now fallen below $66,000 by the end of March. Earlier in the month, it traded between $66,000 and $67,000, but renewed selling pushed it lower. Ethereum, though holding above $2,000, has mirrored Bitcoin's decline, reflecting broader market weakness.
The drop in crypto prices comes as bond yields rise, making riskier assets less attractive. Market participants are now pricing in a more aggressive stance from the US Federal Reserve, reducing hopes for interest rate cuts in 2026. Geopolitical instability has added to the uncertainty, further dampening investor appetite for volatile assets like cryptocurrencies. Data shows Bitcoin's dominance and low exchange reserves previously supported its price, which peaked near $70,150 in early March. Ethereum, closely tracking Bitcoin's movements, remains 62% below its all-time high. Analysts note that while macroeconomic factors like Fed rates and inflation still play a role, Bitcoin's influence continues to drive most of Ethereum's price swings. With bond volatility increasing, equities and cryptocurrencies face additional headwinds. The combination of higher yields, geopolitical risks, and shifting Fed expectations has created a challenging environment for risk assets.
The decline in Bitcoin and Ethereum highlights the broader market unease as investors reassess risk exposure. Rising bond yields and geopolitical tensions are likely to keep pressure on crypto prices in the near term. The Federal Reserve's tightening stance further reduces the likelihood of near-term rate relief, leaving markets in a cautious mood.
