Crypto markets slide as renewed Iran conflict fuels rate hike fears

Bitcoin and Ethereum prices dropped on Wednesday, 2 September 2026, following renewed US airstrikes on Iranian targets and subsequent Iranian retaliation with rockets and drones. The geopolitical escalation has pushed up oil prices, intensifying inflation concerns ahead of a scheduled Federal Reserve meeting later in September.

Bitcoin opened at $77,395.89, down 1.5 per cent from the previous day’s opening price. By 7:13 a.m. ET, the digital asset had declined further to $76,597.13. This latest dip continues a period of volatility for the cryptocurrency, which reached an all-time high of $126,198.07 in October 2025.

Ethereum also faced downward pressure, opening at $2,417.66, a 2.0 per cent decrease from Tuesday’s open. The price of the second-largest cryptocurrency fell to $2,373.76 by 7:13 a.m. ET. Ethereum had previously peaked at $4,953.73 in August 2025.

The renewed fighting has raised oil prices again, keeping inflation concerns high ahead of the critical Federal Reserve meeting. This latest pressure on energy prices is increasing the probability of a rate increase, a development that is likely to push crypto prices even lower since cryptocurrencies do not pay interest.

Investors are now watching how the conflict between the United States and Iran will impact global energy markets and, by extension, monetary policy decisions. The Federal Reserve’s stance will be pivotal in determining the near-term trajectory for digital assets.

According to Yahoo Finance, the market reaction underscores the sensitivity of cryptocurrency values to macroeconomic factors and geopolitical risk. As the war reignites, traders are adjusting their positions in response to the shifting risk landscape.