The world of cryptocurrencies continues to be shaped by global headlines, unable to return to its own distinctive agenda. For this emerging asset class, finding firm ground amid shifting geopolitical and macroeconomic landscapes remains a steep challenge. Despite hopes that last year would bring a wave of gains, various factors—including delayed interest rate cuts and tariff changes—created a persistently bearish environment, especially for altcoins. Whereas crypto prices were once driven largely by sector-specific developments, investors today find themselves tracking events like tankers transiting the Strait of Hormuz and missile alerts in the region. Against this backdrop, Fitch Ratings has issued a warning regarding recent developments—an alert that crypto investors would do well to consider.
Fitch Ratings assesses Iran war risks
On Monday, Fitch Ratings—one of the world’s leading credit rating agencies—published a report evaluating the prolonged risks posed by the ongoing Iran conflict, focusing particularly on disruptions to demand. While the military standoff between Iran and the United States takes place over great distances, global markets remain deeply interconnected. Crude oil prices have already exceeded $100 per barrel, and analysts are projecting that this elevated level will persist through 2026. In parallel, global equity prices could see an approximate 10% decline, driven by extended volatility and uncertainty.
Analysts at Fitch warn that, in a negative scenario, several key indicators could rapidly deteriorate:
“This scenario assumes, relative to our base case, that U.S. 10-year Treasury yields rise by 50 basis points, spreads on U.S. investment-grade debt widen by 100 basis points, and U.S. high-yield bond spreads by 200 basis points. After four quarters, effects on inflation and GDP are estimated at +1.4 percentage points and -1.2 percentage points, respectively. Fitch’s March Global Economic Outlook baseline projects 3.0% inflation and 2.2% GDP growth for 2026.”
With jet fuel accounting for 20% of operating costs, airlines worldwide are already feeling the squeeze from persistently high oil prices.
“Most North American carriers have not fully hedged fuel risks, leaving them exposed to sustained price rises. JetBlue and WestJet, in particular, face elevated risk due to limited rating headroom. In contrast, despite a global rise in LNG prices, North American natural gas reactions have been muted, as most U.S. LNG export capacity is already fully contracted.”
Fitch also notes that the outlook for the global chemicals sector has worsened due to costlier petroleum products. Meanwhile, the automotive sector contends with weakened purchasing power and the dual challenge of high fuel and elevated interest rates.
The combined effect of more expensive building materials and higher borrowing rates could further fuel housing inflation. With household budgets under strain, Fitch Ratings warns that demand in consumer sectors may shrink, prompting it to revise some outlooks from neutral to “deteriorating.”
Another area of concern is helium—a critical component in semiconductor manufacturing—where extended shortages are forcing producers to resort to costly alternatives or face production interruptions. The Strait of Hormuz, a vital corridor for commodities including fertilizers and helium, remains a strategic chokepoint.
Negative outlook for cryptocurrencies
Bitcoin (BTC) has been on a downward trend since November 13, recently forming a second leg to its decline. Unless a major reversal occurs soon, the price appears poised for another step down. Should the “new regime” scenario in Iran not materialize—or if a short-term settlement does not emerge—the current support level is at risk of breaking. In this case, BTC could slip into the $60,000–$45,000 range in the near future. While it is difficult to predict whether the lower boundary will be tested, mounting inflation, rising interest rates, economic slowdown, and the onset of a new global monetary tightening cycle all signal the potential for further crypto selloffs.
The outlook becomes even bleaker if U.S. stock markets, already not far from their peaks, experience notable declines. As cryptocurrencies have shown a positive correlation with equities, further drops in stocks could drag digital asset prices down as well.
Even if a ceasefire or agreement were to be reached today, analysts estimate that the market fallout would persist for more than two months. This suggests that a challenging period could be in store for cryptocurrencies over the next three to four months, regardless of diplomatic developments.
A potential wildcard could be the U.S. Federal Reserve lowering interest rates by 50 basis points later this year, citing a softening in demand and only modestly rising inflation. Such a move could help stave off stagflation, providing some relief for markets.
Rick Rieder, a top executive at BlackRock, commented as the article was going to press:
“The Fed should cut rates, and I believe they will,” Rieder said in a CNBC interview.
