Bitcoin rises about 1% as inflation concerns ease

The cryptocurrency was up 1.1% to $64,872.0, recovering from last week’s volatility as investors returned to risk assets

Bitcoin rose more than 1% on Monday, as a halt in Iran-U.S. attacks over the weekend sent oil prices sharply lower and reduced immediate inflation concerns.

The cryptocurrency was up 1.1% to $64,872.0 by 21:20 GMT, recovering from last week’s volatility as investors returned to risk assets. Bitcoin ended the last week largely unchanged amid choppy trading.

World markets got a lift on Monday after oil prices slumped following a pause in tit-for-tat strikes between Iran and U.S.

Oil prices had climbed nearly 20% over a two-week span, with Brent soaring 20.6% and WTI surging 19.2%.

The decline in oil eased inflationary concerns ahead of a U.S. central bank rate decision later this week. The bank is mostly expected to hold interest rates steady, with the CME FedWatch tool showing a probability of about 62% for that outcome. However, the outlook for monetary policy has largely been in flux this month amid the dynamic situation in the Middle East.

Higher interest rates typically reduce the appeal of speculative assets such as cryptocurrencies by increasing returns on safer investments and tightening financial conditions.

Investors will also be keen to hear from new central bank Chair Kevin Warsh, after receiving largely hawkish commentary from him since the last central bank rate decision in June.

Risk sentiment will also be tested this week as technology heavyweights including Microsoft, Meta Platforms, Apple, and Amazon are scheduled to release earnings. Their guidance will be closely watched for their artificial intelligence spending plans.

Bitcoin has increasingly traded in line with technology stocks and other risk assets this year.