Higher Treasury yields, climbing energy prices and a stronger U.S. dollar are weighing on bitcoin and technology stocks, while silver has dropped below $59 an ounce.
Brent crude is trading at a historically wide premium over WTI, with Brent near $105 per barrel and WTI around $92.50. The difference between the two benchmarks is approximately $12.50 per barrel.
Similar or larger spreads have appeared during previous periods of severe market stress. Between 2011 and 2013, rapidly increasing North American oil production exceeded available pipeline capacity, pushing WTI prices lower.
During the COVID-19 pandemic, a collapse in fuel demand combined with limited storage capacity drove the expiring WTI futures contract below zero.
After the Iran war began in February, the Brent-WTI spread expanded sharply in March. Disruptions to shipping through the Strait of Hormuz and rising freight costs pushed Brent higher relative to WTI, while stronger U.S. inventories helped support the domestic benchmark.
The growing spread underscores increasing supply constraints and transportation pressures affecting globally traded crude.
Coinbase Cryptography Chief Challenges ‘Bunker Mode’ Warning
Coinbase cryptography chief Yehuda Lindell has pushed back against the viral warning from Ethereum researcher Justin Drake that artificial intelligence could soon threaten the cryptographic foundations of bitcoin, ether and other cryptocurrencies.
“There is no evidence whatsoever pointing to a break of decades old hardness assumptions like elliptic curve cryptography,” Lindell, Coinbase’s head of cryptography, wrote.
Lindell was responding to Drake’s widely circulated post arguing that AI-driven advances in mathematics could break the cryptography protecting major cryptocurrencies well before quantum computers become available.
Drake urged the blockchain industry to enter “bunker mode” and encouraged crypto holders to move their assets to new addresses that have never been used to sign transactions.
“I wasn’t going to comment since this is a really bad take IMO, but since it’s taken off I feel the need to,” Lindell said.
He argued that claiming AI’s progress in mathematics automatically puts elliptic-curve cryptography at risk has no logical foundation.
Lindell also highlighted the broader consequences if elliptic-curve cryptography were actually compromised. Such an advance could affect much more than crypto, potentially allowing attackers to create fraudulent PKI certificates, impersonate banking websites, distribute malicious banking applications and even sign compromised operating systems that could take control of users’ devices.
He described the warning as fearmongering because there is currently no evidence that such a capability exists.
According to Lindell, making claims of an imminent cryptographic breakthrough without supporting evidence is irresponsible and amounts to fear, uncertainty and doubt because the claim cannot be disproved while there is also no evidence confirming it.
Initial Jobless Claims Remain Low
U.S. initial jobless claims fell to 197,000 last week from 199,000 previously. Economists had expected claims to edge higher to 200,000.
Claims have remained near historically low levels for months, creating uncertainty over whether the labor market remains exceptionally strong or whether jobless claims have become a less reliable indicator of economic conditions.
Bitcoin Falls Below $83,000
Bitcoin continued to weaken as Treasury yields, oil prices and the dollar all moved higher, creating additional pressure on risk assets.
The U.S. 10-year Treasury yield climbed to 5.352%, while the 30-year yield continued making new highs above 5.73%.
WTI crude gained more than 4% over 24 hours to around $92.40 per barrel. Brent also rose about 4% to $105. New York Harbor ultra-low sulfur diesel futures increased another 4% to $4.80 per gallon, adding to the broader surge in energy prices.
The U.S. Dollar Index, or DXY, strengthened to 102.4, adding another headwind for risk assets as investors also contend with renewed inflation concerns and higher yields.
Bitcoin slipped below $83,000 to $82,965, down almost 1% over the past 24 hours.
Gold remained above $4,100 an ounce, while silver fell to new lows below $59. Technology stocks also weakened, with Nasdaq 100 futures declining nearly 1%.
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