Rising oil prices push Bitcoin lower again

The crypto market is under pressure again as oil prices jump sharply. Bitcoin lost ground on Friday, falling back towards $80.000, as investors around the world react to rising energy prices and growing inflation fears.

Brent crude, the leading international benchmark, rose 2.6 per cent to above $116 a barrel. That put oil at its highest level since late April. US WTI crude also moved sharply higher, rising 3.1 per cent to $102.53 a barrel, its highest level in about a month.

Inflation

Rising energy prices are putting pressure on financial markets. More expensive oil raises the prospect of persistent inflation for most western governments, which may make central banks more reluctant to cut interest rates. That prospect traditionally dampens risk appetite among investors.

Bitcoin, which often benefits from a supportive risk environment, could not escape the negative mood. The world’s largest cryptocurrency turned lower and fell back to around $80.000. Analysts point out that a sharp rise in oil prices often creates uncertainty about economic growth and inflation, which can weigh on demand for risk assets such as equities and cryptocurrencies.

For now, the crypto market therefore appears to be reacting mainly to developments outside the sector itself. As long as oil prices remain high and inflation concerns dominate markets, pressure on Bitcoin and other digital assets may persist.