Bitcoin Falls Below $80,000 as US-Iran Conflict Lifts Oil, Clouds Fed Outlook

Bitcoin fell below $80,000 as rising oil prices and uncertainty over US interest rates weighed on sentiment amid an escalating military clash between the US and Iran.

As of 2 p.m. in South Korea on Sept. 7, Bitcoin was trading at $79,714.99 on Binance's USDT market, down 0.2% from a day earlier. It hovered around the $80,000 level over the weekend, but weakened as tensions in the Middle East flared again.

US Central Command said on Sept. 5 that it attacked three Iranian tankers near Kharg Island, Jask and the Gulf of Oman. Admiral Brad Cooper said the strikes were intended to impose greater economic costs if Iran attacked two US vessels. Since resuming its maritime blockade operation on July 14, the US military has rerouted 92 commercial ships, disabled three vessels and boarded two.

International oil prices rose on concern that supply disruptions in the Middle East could tighten the market. West Texas Intermediate crude rose about 1% to $92.72 a barrel, extending its gain this month to more than 6%. Higher oil prices could add to inflation pressures and limit the Federal Reserve's room to ease monetary policy, adding pressure to crypto markets.

Stronger-than-expected US employment data for August also hurt investor sentiment by raising the likelihood of another Fed rate increase. At the same time, President Donald Trump repeatedly called on the Fed to cut rates after the jobs report, deepening uncertainty over the policy outlook.

A security incident involving about $320 million on Bitcoin sidechain Liquid Network also added to market caution. CoinDesk said uncertainty over the Fed's policy path, rather than a rate increase itself, could curb risk appetite across markets including Bitcoin.