TLDR
- Bitcoin dropped below $69,000, falling over 4% as oil prices surged to $119 a barrel
- Brent crude briefly hit $119 due to U.S.-Iran conflict disrupting Middle East energy supplies
- Analysts warn oil could reach $200 per barrel if the Strait of Hormuz stays closed
- The Federal Reserve held rates steady and signaled rate cuts could be delayed due to rising inflation
- On-chain data shows whale wallets holding 100+ BTC grew by 753 over the past three months
Bitcoin dropped sharply this week, falling below $70,000 as a combination of surging oil prices and cautious signals from the Federal Reserve hit risk appetite across financial markets.
The world’s largest cryptocurrency fell to a low of $68,814 on Thursday, down over 4% from an intraday high above $71,000. By Friday morning it had steadied near $70,675, still slightly in the red.
The drop came as Brent crude oil briefly surged to $119 a barrel on Thursday. The spike was driven by ongoing conflict between the U.S. and Iran, with both sides reportedly striking energy facilities.
Middle Eastern benchmark crudes like Oman and Dubai were already trading above $150 per barrel. Vandana Hari, founder of oil analysis firm Vanda Insights, told Al Jazeera that a $200 price for oil was “already within sight.”
“How much further crude climbs from here almost entirely hinges on how much longer the Strait of Hormuz remains closed,” Hari said.
Adi Imsirovic, an energy expert at the University of Oxford, also told Al Jazeera that $200 oil was “perfectly possible” and described it as “a major handbrake to the world economy.”
Oil Volatility Hits Risk Assets
Market commentator The Kobeissi Letter noted that Bitcoin’s drop was part of a broad sell-off tied to rising energy prices. “The world is quite literally facing what appears to be the largest energy crisis in history,” they wrote on X.
https://twitter.com/KobeissiLetter/status/2034608583887700121?s=20
Oil prices later pulled back after several interventions. Israeli Prime Minister Benjamin Netanyahu said Israel would not attack Iranian energy facilities further. U.S. Treasury Secretary Scott Bessent said Washington may release oil from the Strategic Petroleum Reserve and could allow sanctioned Iranian oil already at sea to reach global markets.
Brent crude fell back below $110 a barrel by Friday, helping stabilize sentiment.
Fed Signals Delay to Rate Cuts
The Federal Reserve kept interest rates unchanged this week. Fed Chair Jerome Powell warned at his press conference that rising oil prices could push inflation higher in the near term, and signaled the central bank would not cut rates until inflation showed clear signs of progress.
PPI inflation data released Thursday showed inflation had already risen to 3.4% last month, before the Iran conflict escalated. Traders are now scaling back expectations for how many rate cuts the Fed could make in 2025.
https://twitter.com/santimentfeed/status/2034746092546662873?s=20
Despite the price drop, on-chain data showed that Bitcoin whale wallets holding 100 or more BTC grew by 753 over the past three months, a 3.9% increase, even as the market value fell 20.2% over the same period.
