Bitcoin hits 7-day low as oil surges past $100 on Iran war risks
Escalating Middle East conflict drives risk-off sentiment, with Brent crude climbing to $115.50
Bitcoin fell to a seven-day low on Monday as oil prices surged past $100 per barrel amid escalating conflict between the United States and Iran, triggering a broad risk-off move across global financial markets.
The world's largest cryptocurrency dropped to approximately $63,068.7, extending losses as investors abandoned risk assets in favor of traditional safe havens including gold and the US dollar. The decline coincided with a sharp rally in energy markets, where Brent crude climbed as high as $115.50 per barrel—a roughly 30% increase over the past week—while West Texas Intermediate surged to $107.59, according to market data from Al Jazeera.
The geopolitical escalation intensified following joint US and Israeli strikes on Iran that began February 28, with subsequent Iranian retaliation threatening energy infrastructure in the Strait of Hormuz, the strategic waterway through which roughly one-fifth of global oil supplies pass. Iranian drone attacks near the Gulf's oldest oil refinery injured 32 civilians, according to reports from the Wall Street Journal.
"Oil soars past $100 a barrel amid Iran war," read one headline from Al Jazeera, as investors braced for potential supply disruptions in a region that holds more than half of the world's proven oil reserves.
The broader market sell-off pushed the CBOE Volatility Index, known as Wall Street's "fear gauge," to 27.30 on March 3—its highest level in three months and a jump of more than 23% within hours. Emerging market stocks have fallen 10% from their recent peaks, with Asian currencies weakening and equities slumping as the conflict develops, according to multiple reports from Bloomberg.
Technology stocks bore the brunt of the selling pressure, with the Nasdaq Composite experiencing a sharp downturn on March 2. By March 8, the S&P 500 was down 1.5% year-to-date, driven largely by underperformance in major technology companies. The surge in oil prices has rekindled inflation concerns, with Chinese sovereign bonds slumping as the energy shock fanned inflation worries.
The conflict's economic toll extends beyond financial markets. More than 23,000 flights to the Middle East have been cancelled, costing airlines nearly $1 billion in lost revenue as Gulf carriers scale back operations, according to data from Benzinga.
Bitcoin's role as a risk asset was on full display during the market turbulence. Rather than acting as an inflation hedge or safe haven—a narrative often promoted by cryptocurrency proponents—bitcoin moved in tandem with other speculative assets, declining as volatility spiked and investors sought shelter in traditional defensive positions.
"Leading cryptocurrencies slid alongside stock futures and commodities Sunday overnight as the ongoing Middle East conflict kept investors on edge," reported Benzinga, noting that technical analysts were watching key support levels.
The market turmoil comes at a delicate moment for the global economy, with central banks still navigating inflation pressures and growth uncertainties. A sustained surge in energy prices could complicate monetary policy decisions, particularly if the conflict disrupts oil supplies for an extended period.