- The crypto market turned red on Friday as risks rose.
- The stock market also retreated, with futures tied to the Dow Jones and Nasdaq 100 falling by over 0.50%.
- Crude oil, natural gas, and shipping costs are soaring as the war continues.
A crypto crash resumed today, with Bitcoin and top altcoins like Dogecoin (DOGE), Zcash (ZEC), and Solana (SOL) falling by over 5%. The market capitalization of all tokens dropped by 2.27% to $2.4 trillion.
Crypto Crash Restarts Amid Geopolitical Risks
Some of the top laggards in the crypto market were Jupiter (JUP), Decred (DCR), TRUMP, and Hyperliquid (HYPE). On the other hand, the top gainers included Kite, OKB, Humanity Protocol, River, and Pi Network.
The crypto crash coincided with a surge in crude oil prices, with Brent and West Texas Intermediate (WTI) rising to $87 and $84, respectively. Gasoline and natural gas prices continued rising this week.
These prices, together with shipping costs, are happening because of the ongoing crisis in the Middle East, where Israel, the United States, and Iran are engaging in fierce fighting.
Analysts believe the war could last weeks or months. In a report today, Politico said the White House was considering the fight lasting until September this year.
Even if the war ends, there are signs that Iran will remain in a state of chaos as the CIA is working with the Kurds to destabilize and possibly overthrow the regime.
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Higher crude oil, natural gas, and shipping costs raise concerns that inflation will continue rising this year. As a result, the elevated inflation will make it hard for the Federal Reserve to cut interest rates this year. Indeed, the CME Fed Futures tool estimates there will be just one rate cut this year, a view supported by Polymarket traders.
The crypto crash is also unfolding as investors remain fearful, with the Crypto Fear and Greed Index in the fear zone at 25. Also, all crypto ETFs experienced outflows on Wednesday, while the futures open interest has dropped to $95 billion.
Still, on the positive side, there is a possibility that a new crypto rally will start soon. This rally will take place if signs emerge that the US and Iran are heading toward a ceasefire. A good example of this is what happened on Wednesday, when Bitcoin and most altcoins surged after a report said that Iran had reached out to the United States.
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