By Caleb Monroe
Bitcoin tumbled sharply on Thursday, slipping beneath the $71,000 mark as investors digested a more hawkish Federal Reserve outlook and a jump in oil prices driven by renewed Middle East tensions.
By 02:25 ET (06:25 GMT), the worlds largest cryptocurrency had declined 4.2% to $70,817.4. That move followed trading above $74,000 in the previous session and a peak near $76,000 earlier in the week.
Policy and energy shocks tighten
Pressure on digital assets intensified after the Federal Reserve opted to hold interest rates steady but signaled that inflation risks remained, especially through the lens of energy-market developments. Policymakers warned that rising oil prices could complicate the disinflation process and potentially delay prospects for policy easing.
The central bank raised its inflation forecast for 2026 to 2.7% from 2.4%, underscoring concern that price pressures could prove more persistent than previously expected.
Crude oil surged above $110 per barrel on Wednesday and continued to extend gains in Asian trading on Thursday after Iran attacked several energy facilities across the Middle East following a strike on its South Pars gas field. The move in oil lent upward pressure to bond yields and supported the dollar, dynamics that have tended to weigh on cryptocurrencies which have increasingly tracked macroeconomic trends.
U.S. stock indices closed lower on Wednesday, while Asian markets opened Wednesday night into Thursday with early declines. The Bank of Japan also kept interest rates steady on Thursday and noted that the future trajectory of the Middle East conflict and crude oil prices could affect Japans inflation path.
Corporate developments in crypto
Separately, a major cryptocurrency exchange has paused plans for an initial public offering amid difficult market conditions. The company had confidentially filed a draft S-1 with the U.S. Securities and Exchange Commission in November, but now appears likely to delay its listing until sentiment in the market improves. The decision comes in the context of a broader downturn in crypto markets since late 2025, where weaker asset prices and lower trading volumes have depressed valuations and investor appetite. The exchange was last valued at $20 billion after raising $800 million.
Altcoins follow Bitcoin lower
Most major altcoins extended losses on Thursday. Ethereum, the second-largest cryptocurrency by market value, dropped 6% to $2,193.41. XRP fell 3.5% to $1.47. Solana and Polygon each declined about 4%, while Cardano plunged 6%. Among meme tokens, Dogecoin slipped 5%.
These moves reflect a broader pullback across risk assets as market participants reassess the timing of potential central bank easing in light of renewed inflation concerns tied to energy markets.
What this means for markets
The confluence of central bank caution and an energy-driven inflation impulse is translating into higher yields and a firmer dollar, conditions that typically strain asset classes seen as higher risk, including cryptocurrencies and some equity sectors. The pause in a major exchanges IPO effort underscores the sensitivity of crypto industry financing and valuations to market sentiment.
As developments unfold in the Middle East and policymakers update inflation and rate expectations, volatility across crypto and related risk markets is likely to persist.