Evening digest: Bitcoin stalls, UK gilt yields hit 2008 highs

On Friday, Bitcoin traded sideways while UK borrowing costs saw a sharp increase with Amazon reportedly planning an AI-integrated smartphone.

Super Micro computer stock fell sharply after being caught in a federal indictment involving the company's co-founder.

Bitcoin stalls amid risk-off sentiment

Bitcoin traded in a narrow range as investors adopted a risk-off approach following escalating geopolitical tensions and a more hawkish stance from the Federal Reserve.

Institutional demand appeared to cool, with spot Bitcoin ETFs recording net outflows of more than $250 million in the latest session.

The broader crypto market briefly pushed total market capitalization above $2.5 trillion before stabilising near $2.49 trillion.

The Crypto Fear and Greed Index remained unchanged at 31, firmly in “Fear” territory, underscoring cautious sentiment.

Bitcoin hovered just below $70,000, with the $69,450–$70,000 range acting as a key support zone.

A sustained hold above this level could open the path toward $72,500, while a breakdown may expose downside risk toward $65,000.

Bitcoin was trading at $69,856 at the time of writing.

UK borrowing costs hit highest since 2008

UK government bond yields surged to their highest levels since the Global Financial Crisis, highlighting mounting inflation concerns and expectations of further policy tightening.

The yield on the 10-year gilt climbed to 4.94%, while the two-year yield rose to 4.58%.

The sell-off in bonds reflects investor concerns over rising energy costs linked to Middle East tensions, particularly disruptions in the Strait of Hormuz.

Oxford Economics warned inflation could reach 4% later this year, while growth forecasts have been revised lower.

Markets are now pricing in multiple rate hikes by the Bank of England, despite efforts by Governor Andrew Bailey to temper expectations.

The rise in yields reflects a broader policy dilemma, as weak growth limits aggressive tightening while inflation risks remain elevated.

Amazon explores AI-driven smartphone comeback

Amazon is developing a new smartphone more than a decade after the failure of its Fire Phone according to a Reuters report.

The project, internally dubbed “Transformer,” is expected to focus on artificial intelligence integration, particularly through its Alexa voice assistant.

The device could function as a continuous interface for users, enabling seamless access to services such as shopping and streaming.

The initiative aligns with a broader industry trend toward AI-powered hardware, though challenges remain.

Analysts note that breaking into the smartphone market—dominated by Apple and Samsung—will be difficult.

The company is also reportedly exploring a simplified “dumbphone” variant inspired by minimalist devices like the Light Phone, reflecting experimentation with alternative form factors.

Super Micro shares plunge on smuggling probe

Shares of Super Micro Computer plunged more than 32% after US prosecutors unsealed an indictment alleging a $2.5 billion scheme to smuggle restricted AI server technology to China.

The case involves three individuals, including co-founder Yih-Shyan “Wally” Liaw.

Prosecutors allege that servers containing advanced chips from Nvidia were diverted through third countries using falsified documentation and staged inspections.

The fallout has raised concerns about compliance risks and potential disruptions to Super Micro’s business, including its relationship with Nvidia.

The company has said, “Supermicro maintains a robust compliance program and is committed to full adherence to all applicable US export and re-export control laws and regulations.” It added, “The Company has been cooperating fully with the government's investigation and will continue to do so.”

Investor sentiment has deteriorated sharply, with the stock now down significantly from recent highs.

Analysts warn that repeated controversies could weigh on long-term valuation and competitiveness, particularly in a sector where trust and regulatory compliance are critical.