Bitcoin declined on Thursday, as traders remain cautious as geopolitical tensions continue to dominate market sentiment.
A pullback in stock markets also weighed on risk sentiment, and rebounding Treasury yields pressured non-yielding assets.
The latest CPI and producer price figures both pointed to easing inflationary pressures, prompting markets to scale back expectations from two Federal Reserve rate hikes this year to just one.
However, ongoing tensions in the Middle East could keep US yields elevated, as prolonged energy disruptions could reignite inflation concerns.
On the bright side, spot Bitcoin ETFs recorded a second consecutive day of inflows, attracting USD 107 million. Although modest, a sustained recovery in ETF flows could help stabilize the cryptocurrency after the substantial outflows seen throughout May and June.
Regulatory developments could also play a crucial role in shaping the medium- to long-term trajectory for Bitcoin. US lawmakers are set to discuss the CLARITY Act. Meanwhile, Japan’s decision to classify cryptocurrencies as financial assets under its securities framework represents another step toward broader institutional integration.
In the near term, however, Bitcoin is likely to remain driven by geopolitical developments and their implications for oil prices, bond yields, and expectations for global monetary policy.
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