First gold and silver, now oil's starting to rally and that's not good news for bitcoin

Bitcoin bulls are facing headwinds as precious metals like gold and silver surge, and now oil prices are also rallying, which could negatively impact the crypto market. West Texas Intermediate (WTI) crude is up 12% this month, reaching $64.30, while Brent crude is at $68.22. Higher oil prices contribute significantly to inflation because they increase transportation and production costs across all goods and services, which are then passed on to consumers. This inflationary pressure typically causes central banks, like the Federal Reserve, to maintain or raise interest rates to curb price increases, rather than cutting them. The Fed recently kept rates steady but indicated that inflation remains elevated, suggesting no rush to ease policy, a stance that rising oil prices could reinforce. This environment of higher borrowing costs is historically detrimental to Bitcoin, which fell significantly in 2022 during rapid Fed tightening. The current oil rally is attributed to geopolitical tensions, specifically fears of conflict between the U.S. and Iran, and decreasing U.S. oil inventories, which signal demand outpacing supply.

(Source：CoinDesk)