Stock futures under pressure after Trump rejects Iran ceasefire proposal

Bitcoin slumped to $83,061.4 on Monday, continuing its downward trajectory from the previous weekend. The leading cryptocurrency experienced a 1.7% decrease, extending losses witnessed over the weekend. The decline was attributed to surging Treasury yields and a lack of progress towards a U.S.-Iran peace deal, which dampened the appetite for risk-driven markets.

Bitcoin had previously enjoyed a two-week gain, buoyed by some optimism surrounding favorable U.S. regulations. Broader crypto prices followed Bitcoin's decline after two weeks of gains. Government bond yields climbed globally as markets anticipated further interest rate hikes to combat inflation. The 10-year U.S. Treasury yield surpassed 5%, a level not observed since 2007, while yields in Japan exceeded their 30-year peaks.

The rise in yields was primarily driven by the belief that major central banks would maintain a hawkish stance following a series of September rate hikes. The Federal Reserve and the Bank of Japan both increased rates in September, signaling additional hikes due to persistent inflation concerns. Higher interest rates negatively impacted speculative assets, such as non-yielding cryptocurrencies, as they reduced market liquidity and made government debt more appealing.

Energy costs, primarily driven by the U.S.-Iran conflict, significantly contributed to inflation this year. The conflict also posed a threat to risk-driven markets due to the unresolved dispute over the Strait of Hormuz. U.S. President Donald Trump hinted at the possibility of further military action against Iran in a weekend interview, following his rejection of a peace deal proposed by Tehran.

While negotiations between the two nations continued, there were no apparent advancements towards a definitive peace agreement. Ongoing hostilities between Yemen's Iran-backed Houthis and Saudi Arabia also fueled concerns about energy-driven inflation. Other major cryptocurrencies, including Ether, XRP, Solana, Cardano, BNB, Dogecoin, and $TRUMP, also experienced declines on Monday, tracking Bitcoin's losses.