Bitcoin (BTC) Tumbles Under $71K as Fed Inflation Outlook and Oil Crisis Rattle Markets

Key Highlights

• Bitcoin declined 4.2% to approximately $70,800 following the Federal Reserve’s rate decision and elevated inflation warnings
• Crude oil prices jumped beyond $110 per barrel after Iran launched attacks on Middle Eastern energy infrastructure
• Federal Reserve increased its 2026 inflation projection to 2.7% from 2.4%, dampening rate cut expectations
• US equity futures dropped, with both the Dow and S&P 500 marking 2026’s lowest closing levels
• Digital asset exchange Kraken suspended its initial public offering amid challenging market dynamics

Bitcoin experienced a sharp decline on Thursday, sliding beneath the $71,000 threshold to settle at $70,817—a 4.2% downturn. The retreat followed the Federal Reserve’s decision to maintain current interest rates while simultaneously expressing heightened inflation concerns.

Bitcoin was exchanging hands above $74,000 just one day earlier and had reached approximately $76,000 during earlier weekly trading.

The Federal Reserve elevated its 2026 inflation outlook to 2.7%, marking an increase from the previous 2.4% projection. Central bank officials indicated that escalating energy costs could potentially postpone anticipated interest rate reductions.

Oil prices experienced a dramatic spike following Iran’s assault on energy infrastructure throughout the Middle East, a response to attacks on its South Pars natural gas facility. Brent crude oil rocketed beyond $115 per barrel.

Elevated oil prices contributed to rising bond yields and a strengthening US dollar. This dual pressure weighed heavily on both cryptocurrency markets and traditional equities.

Equity Markets Face Downward Pressure

US equity futures registered losses on Thursday. Dow Jones Industrial Average futures declined 0.3%, while both S&P 500 and Nasdaq 100 contracts retreated approximately 0.2%.

Both the Dow and S&P 500 concluded Wednesday’s session at their weakest positions recorded in 2026. Asian equity markets similarly experienced declines during early Thursday trade.

The Bank of Japan maintained its current interest rate policy on Thursday. Japanese central bank officials cautioned that ongoing Middle Eastern tensions and volatile crude oil markets could influence the nation’s inflation trajectory.

Market participants are now closely monitoring weekly unemployment claims data and the Philadelphia Fed Manufacturing Index, with both reports scheduled for Thursday’s release.

Micron Technology stock decreased more than 2% during extended trading hours, despite the semiconductor manufacturer posting robust quarterly revenue expansion. Both Alibaba and FedEx were scheduled to announce earnings results before Thursday’s market open.

Federal Reserve Chairman Jerome Powell’s cautious rhetoric has convinced market participants that interest rates will remain unchanged for the foreseeable future, notwithstanding the Fed’s suggestion that one rate reduction might still materialize in 2026.

Alternative Cryptocurrencies and Kraken’s Public Offering Postponement

The majority of leading alternative cryptocurrencies registered significant losses on Thursday. Ethereum tumbled 6% to $2,193. XRP decreased 3.5% to $1.47. Both Solana and Polygon posted 4% declines, while Cardano dropped 6%. Dogecoin retreated 5%.

Cryptocurrency exchange platform Kraken has postponed its anticipated initial public offering, according to reports from CoinDesk. The exchange had discretely submitted preliminary documentation to the SEC during November 2024.

Kraken attributed the postponement to unfavorable market circumstances. The platform carried a $20 billion valuation following its $800 million fundraising round.

Depressed cryptocurrency valuations and diminished trading activity since the latter part of 2025 have created obstacles for digital asset companies pursuing public listings. Kraken announced it would postpone its IPO plans until market conditions demonstrate meaningful improvement.

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