Geopolitical Tensions Fuel Market Volatility, Bitcoin Holds Steady Above $70,000

European stock markets are expected to open lower on Wednesday due to escalating tensions related to Iran. The U.S. Central Command confirmed it recently sank 16 Iranian mine-laying vessels near the Strait of Hormuz, exacerbating regional tensions. As a result, the UK's FTSE 100, Germany's DAX, and France's CAC 40 are predicted to open down 0.3%, 0.3%, and 0.4% respectively, with Italy's FTSE MIB falling even further by 0.5%. Previously, the European Stoxx 600 index rose 1.8% on Tuesday amid expectations of easing tensions, but the Pentagon's latest warning of the most intense airstrikes against Iran this year reversed market sentiment.

Despite pressure on traditional assets, the crypto market has shown strong resilience. Bitcoin's price has held steady near $70,000, without significant fluctuations. Data shows that cryptocurrency funds recorded a net inflow of $619 million in the past 24 hours, with Bitcoin-based financial products being the primary destination for funds. The stablecoin market is expanding in tandem, with USDC's market capitalization approaching a record high of $78.6 billion, reflecting a large accumulation of "cash reserves" in the market, poised for future entry.

Meanwhile, the Federal Reserve's interest rate decision on March 18th is the focus of the market. Driven by inflation concerns fueled by soaring oil prices, market expectations for a rate cut this month have fallen below 1%. Goldman Sachs and JPMorgan Chase both point out that energy price volatility is delaying the Fed's start to an easing cycle, and historical data shows that uncertainty in interest rate policy typically puts pressure on risk assets, including crypto assets.