Bitcoin Slides Toward $81,000 on Thursday as Oil Above $110 Revives Rate-Hike Concerns
Bitcoin fell nearly 4% over 24 hours on Thursday, trading as low as $81,331, after oil prices jumped on Middle East conflict. Higher oil has revived inflation concerns and the chance of U.S. interest-rate increases, according to Bitcoin Magazine. The move affects traders in risk assets, which have often moved with tech stocks.
Bitcoin slid on Thursday, erasing gains made earlier in the week. According to Bitcoin Magazine, the largest cryptocurrency was down nearly 4% over 24 hours in New York and traded as low as $81,331. On Wednesday it had been closing in on $85,000 as investors returned to tech stocks after SpaceX earnings.
The reversal followed a jump in oil prices tied to the Middle East. Stocks also fell after reports of further attacks by Yemen's Houthis on Saudi Arabia, which raised fears of oil supply disruptions and a wider regional conflict.
The report said higher oil can, at least in the short term, weigh on risk-on assets because it raises the odds of the U.S. central bank lifting interest rates. Bitcoin has in the past moved at times with tech stocks and the Nasdaq, and has tended to come under pressure on war news. When the U.S. and Israel first attacked Iran in February, bitcoin dropped sharply.
The Federal Reserve has said bringing inflation down is its top priority. Rising oil is also feeding what many politicians call an affordability crisis ahead of the November 3 U.S. election.
Despite the dip, bitcoin just had its best quarter in years, and analysts cited by the outlet say it is in a bull market after rising above its 365-day moving average. Last month it held up as the Fed raised rates and lawmakers blocked the Clarity Act.