Bitcoin drops to $71,000 as risk assets slide

The world’s largest cryptocurrency had jumped close to $76,000 in the prior session

Bitcoin dropped on Wednesday, as risk assets slide after the U.S. central bank expressed great uncertainty over the impact of surging oil prices on inflation and the country’s economy.

Further escalation in the Middle East war and hotter-than-expected U.S. inflation data also weighed on sentiment. The mood was further clouded after a report said crypto exchange Kraken had put its market debut on hold.

Bitcoin dipped 4.5% to $71,004.2 by 22:33 GMT.

The world’s largest cryptocurrency had jumped close to $76,000 in the prior session.

The U.S. central bank on Wednesday held interest rates steady, as widely expected. Separately, the central bank’s updated dot plot showed an increase in core PCE inflation projections this year, which chair Jerome Powell said reflected rising oil prices and slow progress on tariffs.

Market participants had hoped that Powell would address the inflationary shock due to the jump in oil prices since the Iran war began, with Brent – the global oil benchmark – surging nearly 50%.

However, Powell largely said that the situation was fluid and that there was no way to know what could happen.

Policymakers will have to wait and see what happens in the Middle East and see how long the current situation lasts, the central bank chair said.

Crude prices have rallied as the war involving Iran continues to disrupt energy flows, raising concerns that sustained price pressures could delay any policy easing and weigh on risk assets such as cryptocurrencies.

CoinDesk on Wednesday reported that crypto exchange Kraken had put its multibillion-dollar initial public offering on hold, citing two people with knowledge of the matter.

Kraken is still weighing a market debut, but is unlikely to move ahead until market condition improve, CoinDesk said.

Kraken’s parent Payward had filed an IPO registration statement in November last year. At that time, Kraken had raised $800 million in new funding at a $20 billion valuation.