Bitcoin fell sharply early Thursday, dropping to below $70,000, as investors digested hawkish messaging from the Federal Reserve alongside a war-linked surge in oil prices.

Cryptos typically prefer an environment where rates are being cut — the Fed held them steady yesterday, and they like a decline in inflationary pressures. But the rise in energy prices risk driving up prices.

The world's premier cryptocurrency dropped 5.5% to $69,782 over the past 24 hours, according to CoinDesk data. Ethereum and popular alt-coin XRP also fell — by 6.8% and 4.5%, respectively.

At the end of its Federal Open Market Committee meeting, the Fed held interest rates steady Wednesday and said in the near term, higher energy prices will push up overall inflation, but it is too soon to know the scope and duration of the potential effects on the economy, Chair Jerome Powell said. Brent crude, the global oil benchmark, rose 7.1% early Thursday.

"We have seen more supply shocks in the last five years than we have seen in many years before that," Powell said. He also noted "a meaningful amount of movement toward fewer cuts."

Risk assets, like equities and cryptocurrencies, came under pressure after Powell' comments.

Write to Alex Kozul-Wright at alexander.kozul-wright@barrons.com

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