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Higher Yields on US Bond Leads to Sharp Drop in Cryptocurrency Price

Business and Finance

Bitcoin falls to its lowest level in almost a year - the price of gold also falls to its lowest level since March 2020.

Higher Yields on US Bond Leads to Sharp Drop in Cryptocurrency Price

The Bitcoin cryptocurrency experienced its steepest drop since March last year and fell 20 percent in one week. On Friday night, the bitcoin unit price was $ 45,326, the lowest in nearly a year. Just five days earlier, the price was over $ 58,000. During Saturday, the price recovered slightly and by 10 am was $ 46,742.

The gold price also fell in the weekly comparison. On Friday, a troy ounce (about 31.1 grams) was worth $ 1,734, a good four percent less than at the start of the week. The last time the price was so low was in June 2020.

Fed Chairman Jerome Powell does not exclude possible economic growth this year, higher than predicted values ​​and increased volatility in the commodity market, which could lead to higher inflation.

In such a situation, the Fed will be forced to tighten monetary policy in order to prevent a sharp jump in prices. Which, accordingly, will lead to an increase in the yield of new issues of treasury and corporate bonds and to a decrease in stock indices.

The yield on 10-year US government bonds (US Treasuries) jumped to 1.5%. Bond prices are falling and yields are rising, amid optimism about the outlook for the economy and heightened inflation concerns.

Investors are betting on an active economic recovery through additional stimulus measures, low interest rates and coronavirus vaccinations.

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