Key Highlights
Bitcoin declined to approximately $65,500 amid surging crude prices and elevated Treasury yields applying pressure to digital assets
Polymarket betting odds for the Digital Asset Market Clarity Act’s passage declined from 46% to 38%
Senior Democratic senators criticized the Clarity Act’s latest version, stating it lacks adequate ethics safeguards and other essential elements
Stock markets across Asia posted gains following Alphabet’s announcement of a $15 billion increase to its annual capital expenditure plans
South Korea’s KOSPI index jumped 4.4%, driven by semiconductor giants SK Hynix and Samsung Electronics on positive AI investment sentiment
Digital asset markets faced headwinds on Thursday as multiple factors converged: escalating energy prices, rising government bond yields, and increasing doubts about pending cryptocurrency legislation. Meanwhile, equity markets in Asia found tailwinds from artificial intelligence spending announcements.
Bitcoin Retreats Under Macroeconomic Strain
The world’s largest cryptocurrency by market capitalization retreated to approximately $65,500 during early Thursday trading hours, representing a 0.7% decline from midnight UTC levels. This downturn extended the correction from Wednesday’s peak near $66,700. Alternative cryptocurrencies including Ether, Solana, and XRP similarly recorded losses.
Energy markets played a central role in the crypto selloff. West Texas Intermediate crude futures advanced to $88.60 per barrel, reaching levels not seen since June 11. This represented a significant recovery from recent lows beneath $70 and reignited concerns about inflationary pressures.
Fixed-income markets reacted swiftly to the energy price movement. The two-year U.S. Treasury yield surged to 4.31%, marking its peak since February 2025. The benchmark 10-year yield climbed to 4.66%, the highest reading since May. Elevated yields typically diminish the appeal of non-interest-bearing assets such as Bitcoin for portfolio managers.
Compounding market anxiety, U.S. military forces launched B-1 long-range bomber strikes against facilities associated with Iran’s Islamic Revolutionary Guard Corps. This action suggested potential escalation beyond the contained strikes observed in preceding days.
Probability of Crypto Legislation Passage Declines
Prospects for crypto regulatory clarity suffered a setback Thursday. A coalition of influential Democratic senators issued statements declaring the most recent version of the Digital Asset Market Clarity Act insufficient regarding ethics standards and other vital components.
Prediction markets responded immediately to the news. On Polymarket, the implied probability of the Clarity Act becoming law dropped from 46% to 38%.
Senate Republicans had unveiled a revised draft earlier this week containing an ethics provision negotiated with White House officials. Senator Bernie Moreno characterized it as featuring “the most powerful ethics language in U.S. history,” though this failed to win over Democratic lawmakers.
Asian Equity Markets Gain on AI Investment News
Stock indices throughout Asia predominantly advanced Thursday. The positive momentum stemmed from Alphabet’s decision to increase its annual capital expenditure guidance by an additional $15 billion, signaling sustained commitment to artificial intelligence infrastructure.
The KOSPI index in South Korea delivered the strongest regional performance, climbing 4.4%. Memory chip manufacturers SK Hynix and Samsung Electronics posted substantial gains on anticipation that expanded AI-related capital spending would drive increased demand for memory products and AI server components.
South Korea’s economic data also exceeded expectations, with second-quarter 2026 GDP expanding 3.7% year-over-year, surpassing analyst estimates of 3.5%. Robust semiconductor export performance contributed significantly to the growth figure.
Japan’s Nikkei 225 index advanced 0.4%. The Hang Seng in Hong Kong climbed 1.1%. China’s Shanghai Composite registered a modest 0.2% increase.
Rising crude oil prices limited broader market enthusiasm. Houthi militant attacks targeting two Saudi Arabian oil tankers in the Red Sea propelled crude to six-week highs for the fifth consecutive session, sustaining inflation worries.
Australian employment data showed 76,300 jobs added in June, substantially exceeding the forecast of 16,400. The strong labor market print increased speculation regarding a potential interest rate increase from the Reserve Bank of Australia before year-end.
Despite reporting better-than-expected quarterly results, Alphabet shares declined in extended trading as investors engaged in profit-taking.
