Hormuz Shipping Hit, Oil Spike Tests Powell’s Patience and Bitcoin’s Floor
Digital Asset Market: Bitcoin hovered around $67,000 to $67,200 on March 31, 2026, near the level that would either snap a five-month losing streak or confirm a rare sixth straight monthly decline, a streak it has only matched once before and never exceeded. Views are mixed: some see recent resilience as a relief rally within a broader downturn, pointing to bearish on-chain flows and the risk of a retest of the low $60,000s, while others argue bitcoin may be forming a bottom and keep bullish longer-term targets, citing renewed inflows into spot bitcoin ETFs that now hold more than 6% of supply and continued large corporate buying. Even though Bitcoin has held up better than equities and gold recently, macro headwinds such as elevated oil prices tied to Middle East conflict, uncertainty about rate policy, and renewed quantum computing concerns could prolong pressure; in prior bear markets, Bitcoin often fell below long-term supports like its 200-week moving average and realized price, levels it has not yet broken this cycle.
Macroeconomics: Euro area inflation jumped sharply in March, with headline HICP rising to about 2.5% year over year and surging month over month, the biggest move since 2022, largely driven by war-related spikes in energy prices, even as underlying pressure cooled with core inflation unexpectedly slipping to about 2.3% and services inflation easing. Goldman notes that the upside came mainly from energy, while core goods and services momentum softened on a seasonally adjusted basis, and it still expects headline inflation to stay above target this year and core inflation to hover in the mid-2% range through 2026 before easing in 2027. Country readings were mixed, with Italy flat, France modestly higher, and faster increases in Germany and Spain, but officials across the region warn that a prolonged conflict could lift inflation expectations, risk second-round wage and pricing effects, and force the ECB to consider earlier and potentially decisive rate hikes, possibly as soon as April if energy stays elevated.
Equities: U.S. stocks rallied Tuesday as reports said President Trump signaled flexibility on ending the Iran conflict without requiring a full reopening of the Strait of Hormuz and told the New York Post the war would not last much longer, lifting the S&P 500 about 1.4%, the Dow about 1.1%, and the Nasdaq about 1.8%. Trump posted that Iran had been essentially decimated and suggested the strait would reopen automatically after a U.S. withdrawal, even as broader messaging from Washington remained inconsistent, mixing talk of diplomacy with threats such as seizing Iran’s oil. Oil prices eased but stayed above $100 a barrel, with WTI near $104 and Brent around $108, while economic data were mixed: Conference Board consumer confidence beat expectations with a stronger present situation reading but weaker expectations, JOLTS showed the lowest hiring rate since 2020, and AAA reported national gasoline prices topping $4 per gallon with diesel averaging about $5.45.
The Fed and US Treasury: Federal Reserve Chair Jerome Powell said inflation expectations remain well anchored despite rising energy prices tied to the US-Israel war on Iran and related disruptions, so the Fed does not need to raise rates in response to a supply-driven oil shock. Speaking at Harvard, he argued that monetary policy works with long and variable lags, meaning a hike now could restrain the economy after the energy shock has faded, and he reiterated that the current 3.5 to 3.75% policy range is a good place to wait while assessing the impacts of the conflict and tariffs. Markets took the comments as dovish, sharply reducing the implied odds of a rate hike by year’s end, while Powell emphasized the Fed will closely monitor inflation expectations, especially longer-run measures, as consumer surveys show near-term expectations rising. He also said turbulence in the roughly $ 3 trillion private credit market looks like a correction with limited links to banks and no clear signs of systemic contagion, and he declined to weigh in on successor politics, as Kevin Warsh’s nomination is stalled amid a separate investigation into Fed headquarters renovations.
Geopolitical: Iran attacked a Kuwait-flagged, fully loaded oil tanker, the Al-Salmi, off Dubai with a drone, causing a fire and hull damage but no reported injuries or oil leak, in the latest escalation affecting shipping near the Strait of Hormuz since U.S. and Israeli strikes on Iran began in late February. Tracking data indicated the tanker was bound for Qingdao carrying about 2 million barrels of Saudi and Kuwaiti crude, though Iran’s Revolutionary Guards claimed they were targeting a different vessel with alleged Israel-linked ties nearby. Oil prices briefly jumped again as the conflict spreads across the region, with the EU warning of prolonged energy disruption, China urging a halt to fighting while noting some of its ships have transited the strait, and Pakistan seeking to mediate. Trump, after earlier threats against Iran’s energy infrastructure, posted that countries short on fuel should “take” the Strait of Hormuz and get their own oil, signaling he wants an out and that the United States may not keep carrying the security burden, even as U.S. reinforcements including 82nd Airborne troops begin arriving in the region and strikes and interceptions are reported from Dubai to Tehran, Saudi Arabia, Turkey, and Lebanon.
View from our desk
Quantum Risk Moves From Theory to Timeline
Google Quantum AI’s latest paper has pulled the market’s attention forward by arguing that cracking the 256-bit elliptic curve cryptography used by Bitcoin and Ethereum may require fewer than 500,000 physical qubits, roughly 20 times fewer than prior estimates. That does not mean Bitcoin is suddenly at immediate risk, but it does compress the window the industry thought it had. More importantly, the paper frames the threat in operational terms: once a public key is exposed, a sufficiently capable quantum machine could theoretically derive a private key in about nine minutes, which is close enough to Bitcoin’s block timing to make the risk concrete rather than academic. With an estimated 6.9 million BTC sitting in wallets tied to already exposed public keys, the concern is less about whether post-quantum cryptography exists and more about whether a decentralized ecosystem can coordinate a migration before a well-resourced actor tests the weakest targets.
Ethereum Looks Further Ahead Than Bitcoin
What stands out is not just the research itself, but the contrast in ecosystem readiness. Ethereum developers are already advancing through a more structured post-quantum transition path, with devnets and a clearer roadmap taking shape, while Bitcoin is still facing early-stage pressure to accelerate proposals such as BIP 360. That gap matters because blockchains do not upgrade like centralized systems. Banks, cloud providers, and large software platforms can force migrations quickly once standards are set. Open networks cannot. They depend on social coordination, wallet support, infrastructure readiness, and user behavior, all of which move slowly. If Google’s estimates are even directionally right, the real bottleneck is unlikely to be cryptographic design. It will be governance, coordination, and execution across an ecosystem that has historically moved with caution.
Oil Shocks Still Hit the U.S. Consumer Fast
The Beijing trade show commentary is a useful reminder that U.S. consumers are not insulated from Middle East disruption just because America produces more of its own energy. Oil is embedded across the supply chain, not only at the pump, but in shipping, plastics, polyester, PVC, packaging, and countless low-cost consumer goods imported into the U.S. When geopolitical risk or a Strait of Hormuz disruption pushes up oil and petrochemical costs, suppliers react quickly by raising prices, stockpiling inputs, and warning of shortages, with those costs flowing downstream into retail baskets. That is why prolonged energy stress becomes a political and economic problem at home so quickly. Higher fuel prices and higher goods prices tend to reinforce each other, pressuring household budgets, weakening discretionary demand, and souring sentiment. The market implication is straightforward: stabilizing energy flows matters not just for crude, but for inflation expectations, consumer resilience, and broader risk appetite.
Happy Trading!
The 1Konto Team
About 1Konto
1Konto powers institutional finance with a unified platform for trading, settlement, and credit across stablecoins, fiat, and digital assets. Through 1KPrime, clients gain access to deep liquidity, real-time cross-border settlement, and integrated Bitcoin-backed credit facilities, all supported by trusted custody infrastructure. From treasury management to automated capital deployment, 1Konto enables the next generation of global financial operations with the security, efficiency, and transparency institutions require.
Contact us today to learn how we can support your trading, settlement, and capital needs.
Not Financial Advice Disclaimer
The market is trading headlines like they’re final verdicts, while the underlying pressures keep quietly compounding. Oil holds the tension, Bitcoin holds the line, and policy sits in that familiar place of waiting for something to break first
Moments like this tend to reveal who is reacting and who is positioning. From the outside, this reads like a desk trying to stay on the right side of that divide.