Oil Price Surge Triggers Bitcoin Sell-Off Amid Escalating Middle East Tensions

Bitcoin's price fell more than 2% on Thursday as oil prices surged above $105 per barrel amid renewed Middle East tensions. The cryptocurrency briefly dropped to $76,748 before rebounding to around $77,208.

The increase in oil prices was driven by Iran's continued confrontation with US forces and attacks on Saudi Arabian assets by Tehran-backed Houthis in Yemen.

Federal Reserve Chair Kevin Warsh stated that US inflation had not fallen enough, adding pressure on risk assets. Higher oil prices can raise inflation by increasing transport, production, and household energy costs.

This, in turn, reduces the likelihood of interest rate cuts, making tighter policy a possibility at the next Federal Reserve meeting.