Bitcoin drops 2.5% amid renewed US-Iran hostilities, pushing crude prices to a two-week high and raising Fed rate hike bets.
Bitcoin (BTC) fell toward $61,500 as geopolitical tensions between the US and Iran escalated, sending oil prices to $75 per barrel. The collapse of a ceasefire and threats to block the Strait of Hormuz triggered risk-off sentiment in markets.
BTC/USD declined 2.5% after US President Donald Trump declared the ceasefire “over,” while reports indicated both nations were considering a Hormuz blockade. Oil prices surged to their highest since June 22, amplifying concerns over inflation and Federal Reserve policy.
Traders now anticipate potential Fed rate hikes, with CME Group’s FedWatch Tool showing increased odds of tightening. Bitcoin’s drop reflects broader market unease over energy-driven economic pressures.