Bitcoin is showing weakness, trading around $77,000 as concerns over inflation in the U.S. rise following a sharp increase in the Producer Price Index (PPI). This surge in inflation has led to a spike in U.S. government bond rates, dampening investor sentiment towards riskier assets.
According to CoinMarketCap, Bitcoin was trading at $77,937, down 0.28% from the previous day as of 8 a.m. on May 18.
Major altcoins also experienced declines. At the same time, Ripple (XRP) fell 0.23% to $1.41, Ethereum decreased by 0.07% to $2,178.03, and Solana (SOL) dropped 0.41% to $86.15.
Market analysts attribute the downturn to rising U.S. government bond rates and inflation concerns. The U.S. PPI for April saw a seasonally adjusted increase of 1.4% compared to the previous month, marking the largest rise since March 2022, nearly four years ago.
As inflation fears grow, U.S. government bond rates have surged. As of May 15, the yield on the 10-year Treasury note rose by 0.138 percentage points to 4.597%. The yield on the 30-year Treasury bond also increased by 0.11 percentage points to 5.12%. This is the first time the 30-year bond yield has exceeded 5% since just before the global financial crisis in 2007.
Typically, rising U.S. government bond rates lead to a stronger preference for safe-haven assets, which can negatively impact riskier assets like Bitcoin.
Meanwhile, on the domestic exchange Bithumb, Bitcoin was trading at approximately 116.17 million won ($77,552), down 0.14% from the previous day. The so-called 'Kimchi Premium,' which reflects the difference between domestic and international prices, was recorded at -0.509%, indicating that domestic prices are lower than overseas prices.
* This article has been translated by AI.
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