Bitcoin Stays Near $86,000 as a Surging Dollar and Euro Slump Raise the Pressure

Bitcoin is trading around $86,000 after a solid opening to October, even as the greenback gains strength. The US Dollar Index jumped to about 102.5 on Monday, its highest level in almost 18 months.

When the dollar rises, companies abroad that borrow in dollars pay more to service that debt, and foreign investors can buy less with their own currencies. Higher US rates add to the squeeze by making cash and government bonds more appealing than stocks or bitcoin.

Fed Hike and Rising Treasury Yields

The Fed lifted rates by 25 basis points in September to a range of 3.75% to 4%. Traders now expect the benchmark to reach 4.5% to 4.75% by June 2027. Long-dated Treasury yields are at their highest in over two decades as inflation, heavy government borrowing and fiscal doubts weigh on bonds.

Euro Weakness and European Political Risk

The euro carries a 57.6% weight in the dollar index, so its slide to roughly 1.12, a 17-month low, has done much of the lifting. France faces mounting concern over its deficit and borrowing costs before next year’s presidential vote, and Spain’s early election on Nov. 29 adds more uncertainty.