Bitcoin fell back sharply on Monday after hitting a record high of $61,781.83 over the weekend after U.S. President Joe Biden signed off on his $1.9 trillion fiscal stimulus and ordered an acceleration in vaccinations, according to Reuters.
Bitcoin’s new high also came as ten-year U.S. Treasury yields hit a 13-month high of 1.64% on Friday.
Because some investors tend to see bitcoin as a hedge against inflation, analysts believe the rise of bitcoin has been helped by the prospects of a steep economic recovery.
“Since the start of 2020, correlations between bitcoin and copper equities and in particular breakeven inflation have increased,” William De Vijlder, BNP Paribas chief economist wrote in a note, looking at the drivers behind the surge of the cryptocurrency.
Bitcoin has more than doubled in 2021, after quadrupling last year.
In early deals in London, the world’s most popular cryptocurrency briefly went under US$55,000.
10-year U.S. yields also retreated back to 1.61 per cent on Monday morning.