Bitcoin climbs above $77,500, XRP leads major tokens; Fed's September rate hike probability rises to 66%, 10-year Treasury yield hits new high since 2023

The cryptocurrency market displayed an independent trend during Thursday’s Asian trading session that diverged from broader risk-off sentiment, making this the key focus of current market analysis. Although the U.S. dollar strengthened and U.S. Treasury yields hit their highest levels of the year amid escalating geopolitical tensions and rising expectations of interest rate hikes—factors that typically put pressure on risk assets—major cryptocurrencies such as Bitcoin defied the trend and rose. This phenomenon suggests that, under specific market conditions, some investors may view cryptocurrencies as alternative assets outside the traditional financial system, with their price dynamics temporarily decoupled from direct macroeconomic constraints. At the same time, the outperformance of individual tokens such as XRP also reflects internal market rotation or capital flows driven by specific narratives.

The broader context of this market volatility is a sharp escalation of geopolitical risks. Summary reports indicate that the conflict near the Strait of Hormuz is no longer a series of sporadic skirmishes, but rather involves direct military confrontation between the United States and Iran, with repercussions extending to major regional oil-producing countries such as Saudi Arabia and Kuwait. From attacks on oil tankers to exchanges of fire at military bases, a series of events has collectively driven up crude oil prices and sparked deep concerns about global energy supply and trade security. These tensions have directly spilled over into financial markets, manifesting as investors selling off risk assets, driving up the U.S. dollar as a safe-haven asset, and pushing up U.S. Treasury yields due to inflation expectations. The rising probability of a Federal Reserve rate hike is a direct response to these high inflation expectations, as the market is pricing in the central bank’s adoption of a more hawkish tightening policy.

Looking ahead, market attention will center on the interplay between two key factors. First is the evolution of the geopolitical situation; any signals of escalation or de-escalation could rapidly alter the trajectory of oil prices, U.S. Treasury yields, and the U.S. dollar, thereby indirectly affecting the macroeconomic environment of the crypto market. Second is the sustainability of the crypto market’s internal momentum. It remains to be seen whether the current rally can withstand ongoing macroeconomic pressures or if it is merely a short-term phenomenon. In particular, against the backdrop of Bitfinex analysts warning of the risk of a historical seasonal pullback, whether market sentiment can remain optimistic and whether further capital inflows will materialize to support current price levels will be key to determining the nature of this rally.