Gradual rollout: Oil price shocks and the risk of war with Iran keep crypto investors on the sidelines

BlockBeats message, April 2, according to CoinDesk: Grayscale, a crypto asset management company, says that heightened geopolitical tensions in the Middle East are causing crypto market investors to take a wait-and-see approach with cash on hand, diluting the macro backdrop that had previously been trending toward improvement. The report states: “The Iran war has almost overshadowed all other market developments in March.” Before the conflict escalated, global economic growth momentum was looking favorable, and central banks also leaned toward rate cuts. However, a sharp jump in oil prices has triggered inflation concerns, pushing up rate-expectation forecasts and weighing on risk assets.

Since the outbreak of the Middle East conflict, the crypto market has seen violent swings but has overall remained in range-bound consolidation. Price action has closely tracked headline-driven volatility in oil prices and risk sentiment. Bitcoin fell into the mid-$60,000s during the first escalation, then rebounded to the low end of $70,000, but it slipped again as the conflict continued and macro conditions tightened. The most recent escalation has further pushed Bitcoin down by about 10% versus the March peak. Even so, since the war broke out, Bitcoin has remained broadly flat overall and even outperformed the US stock market in certain periods.

The report points out that despite market turmoil, crypto assets have shown clear resilience—prices appear to have stabilized relatively amid the volatility, and a more durable bottom may be forming. Crypto spot investment products have continued to record net inflows, and futures open interest has also been rising, indicating that risk appetite beneath the surface is moving toward stabilization. Grayscale believes that the fading of uncertainty in the current stage is still a key catalyst for the ongoing rebound. If the conflict eases and energy prices fall back, the market could quickly reprice toward a more favorable macro environment.