Bitcoin's latest fear unlocked as rate hike bets rise and bond markets crumble

For now, surging oil prices and persistent geopolitical tensions are driving inflation fears and weakening traditional safe-haven assets.

“Bitcoin's latest fear unlocked as rate hike bets rise and bond markets crumble For now, surging oil prices and persistent geopolitical tensions are driving inflation fears and weakening traditional safe-haven assets”

@coindesk

Markets are now seriously pricing in the odds of an imminent U.S. rate hike, a far cry from weeks ago, when the debate was about how many Fed rate cuts there would be in 2026.

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According to CME FedWatch, the chances of the Fed tightening policy at its next meeting in April have risen to 12%.

That's up from 0% one week ago and an even sharper reversal from two months ago, when the conventional wisdom said a rate cut was likely that month.

Oil is up 50% since the Iran conflict began, pressuring inflation and growth.

As the economy shows only faint signs of slowing, inflation remains above the central bank's 2% target, and oil prices are up 50% in three weeks, rate traders are beginning to contemplate a rate hike as soon as April.

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The bond market selloff is global, with the U.K.'s 10-year gilt yield topping 5% for the first time since 2008.

“Bitcoin's latest fear unlocked as rate hike bets rise and bond markets crumble For now, surging oil prices and persistent geopolitical tensions are driving inflation fears and weakening traditional safe-haven assets”

@coindesk

The long end of the bond curve has sold off sharply alongside, with the 10-year U.S. Treasury note up another 10 basis points on Friday to 4.38% versus under 4% at the start of March.

The S&P 500 is down another 0.9% today, on track for a fourth straight weekly decline and now lower by more than 5% since late February.

The Nasdaq is down similarly, including a 1.2% drop on Friday.

Bitcoin continues to hover around $70,000, and — up modestly since the start of March — remains one of the best-performing assets since the war began.

'Bitcoin has once again acted as the canary in the macro coal mine,' said Andre Dragosch, European Head of Research at Bitwise, noting that Bitcoin is pricing a recession at current levels while many traditional assets are not.

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Separately, Coinbase said it's offering perpetual stock futures to non-U.S. traders, allowing leveraged positions on large-cap companies including Apple, Microsoft and Tesla, as well as on ETFs tracking the S&P 500 and Nasdaq indexes, with contracts trade 24/7, are cash-settled in USDC and allow for up to 10-times leverage on single-stock contracts and 20-times on ETF products.

The move is part of Coinbase's push to become the 'Everything Exchange'.