Bitcoin price fell below $63,000 on Friday as a short-lived rebound in Asian semiconductor stocks faded, adding pressure as the cryptocurrency entered its historically weak August trading period.

Bitcoin price falls below $63K as risk assets weaken

Bitcoin traded below $63,000 after losing approximately 3% over the previous 24 hours. The decline followed renewed weakness in Asian technology shares, particularly companies tied to the artificial intelligence and semiconductor sectors.

Ethereum fell 2.8% to around $1,860, while Solana declined 2% to approximately $73. XRP traded near $1.06 as selling spread across large-cap cryptocurrencies.

The pullback came one day after Samsung Electronics and SK Hynix rallied roughly 25%, helping South Korea’s KOSPI recover from a steep multiweek decline. That rebound initially suggested investors were returning to semiconductor stocks following heavy selling.

Momentum failed to carry into Friday, however, raising concerns that Thursday’s advance was a temporary relief rally rather than the start of a sustained recovery.

Why faltering AI stocks are weighing on crypto

Crypto assets and AI-related equities have increasingly traded as part of the same risk-sensitive market. Both sectors rely heavily on speculative capital and tend to weaken when investors reduce exposure to high-valuation assets.

Recent pressure on semiconductor stocks has centered on questions about whether AI infrastructure spending can continue at its current pace. Investors are also examining whether future demand for memory chips and computing hardware can support valuations reached during the AI investment boom.

Those concerns are not directly related to Bitcoin’s network or adoption. However, broad risk reduction can still affect crypto as institutional traders rebalance portfolios, reduce leverage and move funds into cash or defensive assets.

For US investors, the next moves in Nvidia and other AI-linked shares could provide an important signal for crypto sentiment. Continued losses across the Nasdaq and semiconductor sector may limit Bitcoin’s ability to recover even without a crypto-specific negative catalyst.

Extreme fear compounds Bitcoin’s August risk

Market sentiment has deteriorated alongside prices. Alternative’s Crypto Fear & Greed Index stood at 25, placing the market in the “Extreme Fear” category. The index was at 28 one week earlier.

CoinGecko category data also showed limited strength across the crypto market. Decentralized finance showed limited relative resilience, but the sector remained under pressure alongside the broader crypto market.

That flat performance suggests investors may be favoring yield-generating or market-neutral DeFi strategies over directional exposure. It does not necessarily indicate that traders expect an immediate market recovery.

Bitcoin’s entry into August adds another risk. Historical data over the past 4 years places its average return for the month near negative 10%, making August one of the cryptocurrency’s weakest calendar periods.

Thin summer liquidity can magnify price swings as participation falls. Traders may also reduce exposure ahead of a month associated with repeated losses, creating additional selling pressure through a self-reinforcing seasonal pattern.

Bitcoin price could test $58K if weakness persists

An 8% decline from Bitcoin’s current level near $63,000 would place the asset around $58,000. That area is likely to attract attention as a possible support zone if selling continues.

A break below $58,000 could expose Bitcoin to a deeper correction, particularly if weak liquidity combines with leveraged long liquidations. Conversely, a recovery above $63,000 would be an early sign that buyers are absorbing supply.

The more important test may come from outside the crypto market. A sustainable floor in AI and semiconductor shares could help restore broader risk appetite, while another sharp decline would increase the likelihood of further pressure on Bitcoin.

Extreme fear has historically appeared near favorable medium-term entry points, but it does not identify an exact market bottom. Bitcoin’s August seasonality, weak technology shares and cautious investor positioning leave the near-term setup tilted toward volatility.

Tether generated approximately $1.5 billion in net operating profit during the second quarter of 2026 as returns from US Treasury holdings and repo operations supported its earnings.

Tether reports $4.1B in excess reserves

Tether’s total assets stood at approximately $187.7 billion at the end of June, while its reported liabilities totaled $183.6 billion. The difference left the stablecoin issuer with roughly $4.1 billion in excess reserves.

The figures appeared in Tether’s latest reserve attestation, prepared by accounting firm BDO and released Friday. US government-backed securities continued to account for the largest portion of the company’s reserve portfolio.

Interest earned from that portfolio, along with returns from repo operations, provided the main source of Tether’s second-quarter profit. The company’s exposure to short-term US debt has made its earnings sensitive to Federal Reserve policy and changes in Treasury yields.

Tether also reported that the circulating supply of USDT reached approximately $184.6 billion by the end of June. Based on the company’s figures, the token controlled more than 60% of the global stablecoin market.

Gold holdings rise as secured lending declines

Tether adjusted the composition of its reserves during the quarter by reducing secured lending and increasing its holdings of physical gold.

Outstanding secured loans fell by about $2.4 billion. Tether did not provide a full breakdown of the borrowers or collateral involved in the lending reduction in the information accompanying the results.

Meanwhile, the company purchased another 14 tons of physical gold, bringing its total holdings to more than 146 tons. The increase continued Tether’s move beyond cash-equivalent reserves and into assets such as gold and Bitcoin.

Tether said its portfolio remained resilient despite sharp price swings affecting both assets during the quarter. Its Bitcoin holdings were valued at approximately $5.8 billion at the end of June.

Those positions may provide additional returns when prices rise, but they also expose part of Tether’s balance sheet to greater market volatility than short-dated US government debt.

US Treasury holdings keep Tether tied to US markets

Tether’s reserve structure gives the company a substantial connection to US financial markets even though USDT operates globally.

The company’s earnings remain heavily influenced by income from US Treasury securities and related repo transactions. Any change in US interest rates could therefore affect future profitability, even if the number of USDT tokens in circulation continues to grow.

Tether is also expanding a separate US-focused stablecoin, USAT. The token recently launched on Celo, its second supported mainnet following Ethereum.

USAT users can mint and redeem the token natively on Celo without relying on third-party bridges. Celo’s CIP-64 upgrade also allows approved ERC-20 tokens to pay network transaction fees, meaning users can use USAT for gas instead of holding a separate token.

The deployment extends Tether’s US-oriented product to a blockchain commonly used for digital-dollar payments. It also separates USAT’s expansion from the company’s larger offshore USDT business.

Tether expands infrastructure beyond stablecoins

Tether said it added more than 30 million users globally during the second quarter while continuing preparations for a full audit by a Big Four accounting firm. It did not provide a completion date for that process.

The company is also exploring tokenized capital-market infrastructure in Africa. Tether and the Nairobi Securities Exchange signed a memorandum of understanding on July 28 covering tokenized securities, blockchain-based market systems and digital asset education in Kenya.

The parties will assess whether USDT could support settlement infrastructure where Kenyan regulations allow. However, the memorandum does not authorize a tokenized security, launch a trading venue or commit the exchange to using USDT.

No pilot date, budget, or binding implementation schedule was disclosed. Future developments will depend on regulatory approval, technical assessments, and whether the exploratory agreement advances into a formal project.

Now, younger generations entering the workforce are less drawn to big companies than the generations prior. They factor in wellness outside of work in addition to salary. “They really care about their family, life issues; whether their work will be valuable to their own life. In that sense private companies might be a better place because they can design their own purpose,” Lee says. In this trend, they may also be interested in alternative organization structures like employee-owned companies or worker cooperatives, which have been growing in popularity, with the federal government even encouraging more employers to adopt such models. Southern staple Publix (no. 9) and warehouse chain WinCo (no. 10) are both employee-owned through an Employee Stock Ownership Plan (ESOP). 

“Usually, employee-owned companies have higher productivity, their revenue growth is usually 3-4% higher than other companies, and then their quit rate is about a third of other companies,” Lee says. “These numbers always show that employees are very actively engaged in their own company, because their perspective is more long term. … These are motivational incentives for employee owners to make their companies better, and perform better, and that could impact their retirement.” On the other hand, worker cooperatives benefit from “a lot of diverse opinions and comments and insight that really makes their corporate strategy different than other competitors,” Lee says.

Since then, average daily liquidations have remained well below this year’s typical $400 million-$500 million range, suggesting there has been little forced selling despite the macro shock, according to Bitfinex.

“Crypto fell less than levered equity themes because the forced-selling fuel was already spent,” the analysts wrote.

Security concerns linger

Separately, the market is also digesting the fallout from a major exploit involving Coldcard, which resulted in at least $38 million worth of bitcoin being stolen.

The incident hasn’t materially affected price action, but it marked another blowback as digital asset-related exploits have surged and reignited debate around risks of self-custody, one of crypto’s fundamental promises.

“The proceeds haven’t yet been liquidated, but the knock-on effect of this and the likelihood of liquidation will weigh on bitcoin pricing in the near term,” said Paul Howard, director at trading firm Wincent. More broadly, he said, the exploit highlights the operational risks that continue to accompany self-custody.

Read more: Coldcard’s $38 million (so far) exploit shakes faith in self-custody, may push investors to ETFs

Eyes on jobs data and ETF flows

Looking ahead, macro uncertainty remains the dominant theme.

Jeff Anderson, managing partner at STS Digital, said markets may be entering “a new volatility regime” as investors swing between expectations for rate cuts, pauses and hikes. That uncertainty, he said, is likely to keep pressure on high-beta assets such as bitcoin until the economic outlook becomes clearer.

Key points: 

• Bond yields have been going up since the beginning of the Iran war, widely attributed to inflation expectations due to energy prices
• However, the five-year inflation expectation priced into Treasury Inflation-Protected Securities is 2.2% and trending down since May
• The driver appears to be rising real yields with bearish implications for yield-free assets like Bitcoin 

Continuation of Q2 bond selling

After yields reached local lows in early March, US government debt has been undergoing a multi-month sell-off. This week, after the most recent meeting of the Federal Open Market Committee (FOMC), 30-year Treasury yields made headlines by reaching the highest level since 2007. 

In line with the two-year yield rising 76 basis points (bps) in this window, a September rate hike by the Federal Reserve is priced into the markets at 63%, according to CME FedWatch.

2Y, 10Y and 30Y US Treasury Yields. Data Source: Treasury.gov

With rates at these elevated levels, government bond investments are, for the first time since 2019, more profitable than cash-and-carry trades in the crypto markets, as per Glassnode’s latest research. 

2Y US Treasury yield and crypto futures carry trade. Source: Glassnode

The mainstream inflation narrative

The reason for the bond sell-off is commonly taken to be the inflationary pressures from higher commodity and energy prices. The multi-month bond sell-off coincides with the start of the Iran war and resulting closure of the Strait of Hormuz. Furthermore, the daily closes of the two-year US government bond yield, West Texas Intermediate (WTI) and Brent Crude have correlated since March at a coefficient of r=0.44:

Daily closes of WTI and Brent Crude against 2Y Yield. Data Sources: fred.stlouisfed.org, EIA

WTI briefly rose once again above $85 a barrel on Thursday after President Donald Trump threatened Iran and bonds sold off leading into the FOMC. Nothing about the conflict suggests a near-term resolution, which has led some to argue that higher rates are being caused by inflation expectations.

WTI (West Texas Intermediate) oil price chart. Source: Tradingeconomics.com

This has driven loud inflation scares through the mainstream financial press, with recent Bloomberg headlines, such as “Global Bonds Are Reeling as Oil Surge Rekindles Inflation Threat”, “US Yields Hit Two-Month High as Oil Sparks Inflation Risk” or “Global Bond Selloff Worsens as Rising Oil Prices Spook Investors”. Among the ever-inflation-aware crypto and precious metals audience, this narrative is popular, too: 

By comparing the yield of a TIPS with a regular, equally dated Treasury, the expectation of future CPI inflation can be estimated as the so-called breakeven rate. And although Treasury yields have been rising, the five-year breakeven rate has gone down sharply since May. 

Five-year breakeven inflation rate. Source: fred.stlouisfed.org

At roughly 2.2%, the five-year breakeven expects the Fed to achieve its 2% target in the medium term. However, more telling is that the breakeven rate has been moving in the opposite direction to the nominal treasury yields.

While the five-year nominal yield rose 33 bps, TIPS data suggests this was the result of an 84 bps rise in the real yield, partially offset by a 51 bps decline in expected inflation. While the inflation narrative remains a compelling story, the marketplace says otherwise. The real story ought to be a rise in real yields. 

What it may mean for crypto

Generally, rising “real” investment returns on bonds and stocks in terms of CPI make non-yielding assets such as Bitcoin relatively less attractive to certain investors. Beyond this, the impact on the crypto market depends on the explanation for higher real rates, of which several are available. 

Reserve liquidation — No clear impact on Crypto. Higher oil prices widen trade deficits for Asian energy importers. As oil is generally priced and settled in US dollars, shortages in the local eurodollar markets in Asia have occurred, which has put their exchange rates under pressure. The Japanese yen (JPY), Philippine peso (PHP) and Indian rupee (RBI) have all required central bank intervention to defend their exchange rates. As these measures are funded by the sale of US Treasury reserves, this puts upward pressure on bond yields. HSBC’s Frederic Neumann is on record attributing the bond sell-off to FX pressure rather than a verdict on the dollar.

Demand destruction — Bearish for Crypto. An oil shock that persists long enough stops being inflationary and starts triggering a recession. Neuberger Berman argued in its second-quarter outlook that investors are underpricing the hit to output from sustained energy prices. The credit contraction that coincides with a recession would be bad for equities and Bitcoin by severely restricting liquidity. In a real sign of recessionary credit events, credit spreads are expected to widen. Cointelegraph reported on possible first signs of this on Wednesday.

Related: Cost to insure AI debt reaches record high amid Asian semiconductor tumble

Investment demand — Likely bearish for Crypto. Real rates may have also responded to expected growth and the demand for capital from the AI sector. Government bond issuance is increasingly competing with the record issuance of corporate bonds from AI hyperscalers. Goldman Sachs Research projects roughly $755 billion of AI capex in 2026 and about $920 billion in 2027. UBS has raised its 2026 investment-grade issuance forecast to $1.8 trillion, with technology supply lifted to $360 billion on hyperscaler guidance. As crypto is competing for a similar pool of capital and investor cohort, this is likely to suppress the sector.