The decline in stock prices is attributed to concerns over rising interest rates. The yield on 10-year US Treasury bonds, considered the benchmark for the bond market, rose to 1.34% last week, reaching the highest level since February last year. This day is also recording 1.352%, up by 0.007% points compared to the previous trading day. An increase in bond yield means a decline in bond prices.
Rising interest rates support the dollar’s value. On this day, the dollar index (DXY) was 90.21, showing a strong trend. Concerns have been raised that the dollar’s value will fall due to large-scale economic stimulus, but as the US Treasury yield rises, the dollar is showing signs of a strong turn.
Bitcoin, which has emerged as an evasion from rising interest rates and inflation concerns, has fallen to the 52,000 dollar level, a sharp decline of more than 8% compared to the previous day. On the other hand, gold, which showed a decline for the second month, is rising by 1.21%. As Bitcoin, which competes with gold, undergoes price adjustments, gold, a traditional safe asset, is refocused.
The decline in bitcoin prices is also affecting individual stocks. Tesla, which led the Bitcoin rally, is down 2.81% in pre-opening transactions. In a situation where there is not much news to lower the stock price, it is interpreted that the bitcoin decline correction is driving Tesla stock price down.
PayPal, which is actively promoting cryptocurrency payments, also fell 2.17%. MicroStrategy (MSTR), the first publicly traded to invest heavily in Bitcoin, is plunging 6.48%.
MSTR has announced plans to buy additional bitcoins by issuing a $1 billion convertible bond.