Bitcoin and Oil

Bitcoin's next big move may have less to do with crypto fundamentals and more to do with the direction of oil prices. The leading cryptocurrency has rebounded to $70,900 from early-week lows near $67,000, tracking a broader risk-on move after the U.S. and Iran agreed to a two-week ceasefire. A sustained decline in oil prices could ripple through the global economy, partially unwinding the inflationary shock triggered by the March surge and giving the Federal Reserve and other major central banks greater room to cut rates later this year. If oil prices remain weak, Bitcoin could rally to $80,000, with gains driven by the unwinding of short positions. Analysts at Bitfinex say a 15-16 percent collapse in crude, if sustained, materially brings forward the potential cut window, which is a structural tailwind for non-yielding risk assets, including Bitcoin.