Cryptocurrency Market Plunges Amid Middle East Energy Crisis

Bitcoin and other risk assets plummeted as the U.S. Federal Reserve held interest rates steady while raising inflation forecasts, coinciding with escalating attacks on energy facilities between Israel and Iran. On April 18 (local time), Bitcoin fell over 4% from the previous day to the $71,000 range, while U.S. stock markets also recorded concurrent declines.

On the same day, Israel bombed Iran's largest gas field, South Pars, and the natural gas refining facility in Asaluyeh on the southwestern coast. This marked the first time Israel directly struck Iran's energy production facilities. In retaliation, Iran's Revolutionary Guard launched missile attacks on gas facility clusters in Qatar, with Qatar Energy announcing "extensive damage has occurred."

Oil Price Surge and Monetary Policy Rigidity Concerns

International oil prices surged following the attacks on Middle Eastern energy facilities. Brent crude futures for May delivery closed at $107.38 per barrel, up 3.8% from the previous session, reaching as high as $111 during trading. This marked the first time Brent crude exceeded $110 per barrel since April 9, nine days prior. West Texas Intermediate (WTI) crude futures also spiked to $100.5 per barrel during the session.

The oil price surge heightened concerns about Fed monetary policy rigidity. The Fed maintained its benchmark interest rate at 3.50-3.75% at the Federal Open Market Committee (FOMC) meeting on April 18 and raised its 2026 inflation forecast from 2.4% to 2.7%, a 0.3 percentage point increase. Fed Chair Jerome Powell stated in a post-meeting press conference that "inflation will be a priority this year" and that the Fed is "monitoring the impact of the Iran war on economic conditions."

Citibank forecasted that Brent crude prices could rise to $120 per barrel within days. Analysis suggests that if energy facility attacks expand and the Strait of Hormuz remains closed for an extended period, prices could average $130 in the second and third quarters of this year. The Strait of Hormuz, through which approximately 20% of global seaborne oil supply passes, is currently effectively blocked.

Cryptocurrencies Reaffirm Risk Asset Characteristics

The cryptocurrency market, classified as a risk asset class, showed vulnerability to this macroeconomic uncertainty. As Bitcoin retreated to the $71,000 range, Ethereum fell over 5%, while Solana and XRP also plunged more than 5% each. U.S. stock markets likewise showed weakness, with the S&P 500 index down 1.4% and the Nasdaq Composite declining 1.5%.

A BitUnix analyst noted, "If rising oil prices suppress expectations for monetary easing, Bitcoin will likely increasingly behave like a risk asset." Indeed, Bitcoin's concurrent decline with stock markets during this event demonstrated movement similar to traditional risk assets.

Global Energy Supply Chain Crisis Intensifies

Iran's South Pars gas field is connected to Qatar's North Field, forming the world's largest gas field complex. With Qatar accounting for 20% of global liquefied natural gas (LNG) supply, concerns are growing that attacks on energy infrastructure in this region could directly shock the global gas supply chain.

Qatar's Foreign Ministry spokesman Majed Al-Ansari emphasized that "acts targeting energy infrastructure pose a significant threat to global energy security, regional populations, and the environment." Iran has designated Saudi Arabia's Samref refinery, the UAE's Al Hosan gas field, and Qatar's Mesaieed petrochemical complex as "legitimate military targets" and warned of attacks.

SEB analyst Ole Hvalbye warned, "If attacks on energy infrastructure expand further, prices will continue to rise." Citibank projected that supply disruptions could reach 11-16 million barrels per day through April.

Future Outlook [AI Analysis]

If the Middle East energy war becomes prolonged, volatility in the cryptocurrency market is likely to expand further. Inflationary pressure from rising oil prices will continue to suppress expectations for Fed rate cuts, which is expected to limit the upward momentum for Bitcoin and other risk assets.

This crisis particularly reaffirmed that Bitcoin possesses risk asset characteristics similar to the Nasdaq rather than the "digital gold" safe-haven narrative. In an environment where global liquidity contraction and geopolitical risks operate simultaneously, the cryptocurrency market may further strengthen its correlation with traditional financial markets.

If energy supply disruptions lead to real economy recession, investor sentiment toward risk assets overall is expected to contract further. In the short term, the possibility of Brent crude rising to $120-130 per barrel should be considered, which could amplify stagflation concerns and negatively impact the cryptocurrency market.