Bitcoin drops below $63,000 as US-Iran tensions lift oil

Bitcoin and other major cryptocurrencies fell on Wednesday as escalating military tensions between the United States and Iran prompted investors to retreat from risk assets. The price of Bitcoin dropped below the $63,000 level, erasing gains from earlier in the week, while a surge in oil prices fueled broader market concerns about persistent inflation and delayed interest rate cuts.

The sell-off followed U.S. military strikes against Iranian targets on Tuesday, July 7, which officials described as retaliation for Iranian attacks on commercial vessels in the Strait of Hormuz. Iran responded with missile and drone strikes on U.S. bases in the Gulf. The U.K. Maritime Trade Operations division subsequently raised its risk assessment for the vital shipping lane to "severe," stoking fears of a wider regional conflict and potential disruptions to global oil supplies.

Brent crude oil prices rose more than 2%, with some reports noting a spike of over 5% at one point. Analysts linked the crypto downturn directly to this geopolitical flare-up, noting that rising oil prices can increase inflationary pressures, which in turn may lead the U.S. Federal Reserve to maintain higher interest rates...