Bitcoin Holds Above $83,700 as High Treasury Yields Limit Rally

Bitcoin edged higher during Asian trading on Thursday, but elevated U.S. Treasury yields continued to limit gains after softer inflation data briefly pushed the cryptocurrency above $85,000.

Bitcoin rose 0.4% to just over $83,700 after climbing as high as $85,500 on Wednesday. The rally followed a weaker-than-expected U.S. inflation report, although momentum faded as Treasury yields remained near multi-decade highs.

Among major cryptocurrencies, HYPE led gains with a 3% rise to around $89, while Dogecoin gained nearly 2% to trade just below $0.10. Ether, BNB, TRX and ZEC advanced less than 1%, while XRP remained unchanged near $1.50. Solana underperformed, falling almost 1% to below $119.

August's U.S. PCE inflation report showed prices rising 3.4% year-over-year, while core inflation excluding food and energy increased 3.0%. Dan Khus, chief analyst at LVRG Research, said the softer figures reduced expectations for another Federal Reserve rate increase in October and made December appear more likely for the next policy move.

Crypto markets initially welcomed the data, with Bitcoin moving back above $85,000 as bond yields briefly declined and appetite for risk assets improved. However, late volatility on Wall Street erased much of the advance.

The benchmark 10-year Treasury yield hovered around 5.28%, close to Wednesday's peak, while the 30-year yield stood near 5.62% after reaching its highest level since 2002. Oil prices declined, helping slow the bond selloff, while the U.S. dollar strengthened.

Risk sentiment improved in Asian equities. Nasdaq 100 futures climbed 0.8%, S&P 500 futures gained 0.4%, Japan's Nikkei surged 2.7%, and South Korea's Kospi advanced 1.2% after Micron Technology issued an upbeat forecast that boosted semiconductor stocks.

Alphabet also gained 1.5% in extended trading as Google began rolling out its Gemini 4 Argon flagship AI model.

Despite cooling inflation, Bitcoin's failure to hold above $85,000 highlights the pressure from elevated borrowing costs. A sustained decline in the 10-year Treasury yield from around 5.3% could provide stronger support for the next Bitcoin rally.