 ▲ Bitcoin (BTC) and cryptocurrency decline / ChatGPT-generated image |
Soaring oil prices sparked by tensions in the Middle East are shaking global asset markets, sending Bitcoin tumbling below $70,000 in a sharp decline.
According to cryptocurrency outlet BeInCrypto on March 11 (local time), as international oil prices surged past $100 per barrel and anxiety in the energy market intensified, Bitcoin (BTC) fell 1.8% at one point to around $69,400. With two tankers attacked near Iraqi waters and reports of Iranian airstrikes escalating geopolitical tensions, criticism has emerged that Bitcoin is failing to serve as a safe-haven asset during wartime. Brent crude jumped more than 9% from the previous day to $101.59, delivering a shock to the market.
The International Energy Agency (IEA) announced the release of a record 400 million barrels of emergency strategic reserves to stabilize oil prices, with the United States contributing 172 million barrels. However, the market response was lukewarm. Experts described the release as a symbolic measure rather than a fundamental solution, estimating an 82% probability that oil prices will remain above $100 through the end of March. Prolonged high oil prices are fueling inflation concerns and becoming a decisive factor in delaying the U.S. Federal Reserve’s rate cuts. As liquidity supply tightens, the upward momentum of risk assets, including Bitcoin, is rapidly weakening.
Since the outbreak of the Iran conflict, Bitcoin has failed to decouple from stock market movements and is currently down about 47% from its all-time high of $126,000 recorded last October. Unlike traditional safe-haven asset gold, which is showing strength, Bitcoin is tracking the trajectory of risk assets, disappointing investors. With expectations for rate cuts fading, pessimistic forecasts now suggest that only one rate cut may occur this year. The potential closure of the Strait of Hormuz and rising transportation costs pose dual obstacles to Bitcoin’s price recovery.
Despite the price decline, institutional investors are quietly accumulating positions through spot Bitcoin ETFs, eyeing a rebound opportunity. According to SoSoValue data, U.S. spot Bitcoin ETFs recorded net inflows for three consecutive days, absorbing a total of $533 million. On March 11 alone, $115.17 million flowed in, bringing cumulative net inflows to $55.9 billion. Bloomberg analyst Eric Balchunas noted that ETF issuers collectively hold 1.28 million BTC—the largest amount globally—indicating that institutions are using the downturn as a buying opportunity.
The growing reliance on virtual assets by sanctioned countries such as Iran and Russia is also drawing market attention. Iran’s central bank reportedly held approximately $507 million worth of USDT before the airstrikes, while Russia’s A7A5 stablecoin recorded $93.3 billion in trading volume in less than a year. The Financial Action Task Force (FATF) estimates that 84% of illicit virtual asset transactions are conducted through stablecoins. Bitcoin is currently behaving more like a liquidity-sensitive asset than a crisis hedge, with short-term price direction likely to be determined by upcoming inflation data and oil price trends.
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