Bitcoin flat at $85.3k as soaring yields offset regulatory hopes

Bitcoin's price held steady at $85.3k on Tuesday, as surging global bond yields largely negated hopes for more positive U.S. regulatory developments. The largest cryptocurrency experienced a 0.26% decline, settling at $85,540.7 by 01:58 ET (05:58 GMT). Similarly, broader crypto prices faced declines, trailing Bitcoin's downward trajectory following sustained gains over the last three months.

Despite the overall market downturn, analysts remained optimistic about the cyclical trend of crypto strength in October, colloquially known as "uptober." The market also kept a keen eye on the impending launch of tokenized U.S. stock trading services, following the Securities and Exchange Commission's approval of tokenized offerings earlier this year.

Global bond yields continued their upward trend, with 10-year U.S. Treasury yields reaching a 24-year peak on Monday. The rise in yields was attributed to growing concerns over mounting fiscal issues in developed nations, coupled with rising oil prices and speculation of additional interest rate hikes. Higher yields typically dampen the allure of speculative, risk-intensive investments like crypto.

Nonetheless, Bitcoin experienced a slight uplift due to the belief that a weakening dollar resulting from bond market pressures could bolster demand for alternative assets like crypto and gold. The Commodity Futures Trading Commission (CFTC) opened a 50-day public comment period on Monday to explore a regulatory framework for leveraged digital asset transactions targeted at retail investors.

The proposed framework aimed to establish a dedicated registration subcategory for platforms that facilitate leveraged, financed, or margin trades, in an effort to mitigate fraud and safeguard retail traders. The CFTC's proposal came shortly after the SEC announced an exemption for tokenized stock offerings, fueling optimism about increased U.S. regulatory support for cryptocurrencies.

Across the crypto market on Tuesday, Bitcoin was followed by Ether, XRP, Solana, Cardano, and BNB, all of which experienced declines ranging from 1.1% to 2.9%. Among the memecoins, Dogecoin and $TRUMP also witnessed a decline, each falling by 1.8% and 2.9%, respectively.