Higher interest rates pressure bitcoin and other risk assets because rising yields on cash and Treasury bonds offer attractive, guaranteed returns, reducing the appeal of non-yielding assets prone to significant intraday volatility.
Conversely, cooling inflation diminishes the rationale for further rate hikes, easing that pressure and allowing capital to flow back toward risk-sensitive investments.
In energy markets, Brent crude climbed 1% to surpass $85 a barrel, marking a third straight session of gains. The rally followed geopolitical escalation after former President Trump threatened additional strikes on Iran and the U.S. reinstated a blockade on Iranian shipping through the Strait of Hormuz, pushing oil prices up 11% over two sessions.
Equities mirrored the cryptocurrency rally. MSCI’s Asia Pacific index surged 2.3%, its largest monthly gain, led by technology stocks. South Korea’s Kospi soared 8.2%, reclaiming its status as the world’s top-performing major benchmark this year, while SK Hynix shares jumped 13% in Seoul following a 27% surge in its American depositary receipts.
“Bitcoin remains a rate-sensitive risk asset rather than a macro hedge,” said Jeff Ko, chief analyst at CoinEx. He noted that the data reduces “immediate downside pressure without building a durable breakout.”
With core inflation at 2.6%—still above the Fed’s 2% target—the reading affords the central bank room to maintain current rates rather than justification for cuts. Ko highlighted the September FOMC meeting as the next critical macroeconomic test, alongside the dollar’s trajectory and the sustainability of spot bitcoin ETF flows.
