Bitcoin falls on US PPI overshoot as 30-year bond yield hits new 19-year high
Bitcoin slipped below $77,000 on Thursday as U.S. producer inflation surprised to the upside and long-term Treasury yields climbed to multidecade highs. The drop came alongside a surge in oil prices after Middle East strikes and despite a $6 billion Treasury buyback that failed to halt gains in bond yields.
Why It Matters
Higher-than-expected PPI and a jump in long-dated Treasury yields boost market expectations of Fed tightening, increasing pressure on risk assets like bitcoin; at the same time, rising oil adds to inflationary forces that can feed through to borrowing costs and consumer prices.
Key Facts
- Bitcoin price: Dipped below $77,000; on track for about 2% loss on the day
- U.S. PPI (August): 5.4% year-on-year, 0.1 percentage point above expectations
- Core PPI (month and year): Final demand less foods, energy, and trade services rose 0.3% in August and 4.7% year-on-year
- WTI crude: Surpassed $100 per barrel for the first time since May 21
- Brent crude: Passed $105 per barrel and neared a 16-week high
Bitcoin fell through the $77,000 level on Thursday as equities and other risk assets reacted to renewed macroeconomic pressure. Trading data showed BTC/USD tracking roughly a 2% decline on the day, with markets reassessing risk after an inflation surprise and a fresh leg higher in long-term U.S. bond yields.
The U.S. Producer Price Index for August came in hotter than expected at 5.4% year-on-year, 0.1 percentage point above forecasts, and July’s headline number was revised higher. Core PPI — which excludes food, energy and trade services — rose 0.3% month-on-month and 4.7% year-on-year, underscoring broad upward pressure on producer prices. The print pushed market odds of a 25 basis-point Fed rate increase at the September meeting higher, with CME Group’s FedWatch Tool showing the probability rising to about 69.8% from 61.2% the day before.
Compounding the inflation story, strikes in the Middle East lifted oil prices: WTI crude topped $100 per barrel for the first time since May 21, while Brent exceeded $105 and approached a 16-week high. Higher energy costs add to the inflationary impulse and help explain the simultaneous move up in Treasury yields.
Long-dated yields moved sharply higher even after the U.S. Treasury repurchased $6 billion of Treasurys as part of a stepped-up buyback operation. The 30-year yield climbed to about 5.353%, a level not seen since June 2007, and the 10-year yield rose to roughly 4.924%, its strongest reading since November 2023. Market observers noted the strain between the bond market and Treasury operations; trading resource The Kobeissi Letter commented on X that “the bond market is quite literally fighting the US Treasury.”
The convergence of hotter inflation data, higher oil prices and rising long-term yields has increased the likelihood of tighter monetary policy, a dynamic that pressured bitcoin and other risk assets. Investors will be watching another key inflation release — the Consumer Price Index due Friday — ahead of the Federal Reserve’s September decision. Meanwhile, central banks elsewhere are also tightening: the European Central Bank enacted a 25 basis-point hike on Thursday, its second such move in 2026.
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