Global markets experienced a broad sell-off on Thursday, driven by escalating tensions in the Middle East and a shift towards a more hawkish monetary policy outlook. Israel and Iran exchanged strikes targeting energy infrastructure, causing a surge in oil prices – Brent crude briefly exceeding $119 per barrel – and reigniting inflation concerns. This prompted a reassessment of Federal Reserve interest rate expectations, with markets now anticipating a ‘higher-for-longer’ rate environment. Consequently, risk assets, including stocks and cryptocurrencies, faced significant pressure. Bitcoin fell nearly 5% to $70,600, while Ethereum declined 6% to $2,187. Traditional stock indices across Asia and the US also saw declines. Gold, often considered a safe haven, surprisingly fell alongside other risk assets, casting doubt on its protective status. While Ethereum founder Vitalik Buterin outlined plans for a ‘lean Ethereum’ focused on security and scalability, the broader market sentiment remained negative. The SEC Chairman's stance on crypto policy is seen as a positive, but insufficient to offset macroeconomic headwinds.
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