Bitcoin Slumps Below $78K Amid Rate-Hike Fears and Hawkish Fed

Bitcoin's price has been under pressure since the appointment of Kevin Warsh as Federal Reserve Chairman, with traders expecting a more hawkish monetary policy. According to CoinGecko data, Bitcoin dropped to $74,190 before recovering towards the $77,000 range.

The market is anticipating a possible rate hike by December, which could further pressure the cryptocurrency. Historical data shows that when the 2-year Treasury yield moves above the federal funds rate, the Federal Reserve tends to raise rates. In this case, the 2-year yield has climbed to 4.14%, its highest level since February 2025.

Analysts warn that Warsh's policy approach may create headwinds for digital assets, despite his previous support for financial innovation and opposition to central bank digital currencies. The crypto market is also closely watching upcoming inflation data and GDP figures, which could impact expectations of rate cuts and Treasury yields.