Next week could bring fresh volatility for Bitcoin as seven central banks confront a major inflation test.

Global markets — including Bitcoin — may face a pivotal week ahead as seven major central banks prepare to announce interest-rate decisions against a backdrop of rising oil prices and renewed inflation concerns.

The busy schedule begins with the policy decision from the Reserve Bank of Australia on March 17. That will be followed by rate announcements from the Bank of Canada and the Federal Reserve on March 18. The week concludes on March 19 with decisions from the Bank of Japan, Swiss National Bank, Bank of England and the European Central Bank.

Until recently, investors largely expected major central banks — led by the Fed — to gradually reduce interest rates this year or at least avoid additional tightening. The rapid development of artificial intelligence, widely seen as a potential disinflationary force due to its ability to boost productivity and reshape labor markets, had strengthened expectations for lower borrowing costs. That outlook had been supportive of risk assets such as bitcoin.

However, geopolitical developments have complicated the picture.

A conflict that began on Feb. 28 with coordinated strikes by the United States and Israel on Iran has escalated through retaliatory actions across the region, disrupting energy shipments through the Middle East and driving oil prices higher.

The resulting surge in crude has revived concerns that global inflation could accelerate again, forcing traders to rethink expectations for monetary policy. Some now worry central banks may be forced to maintain higher interest rates for longer or adopt a more hawkish stance.

If policymakers signal tougher inflation-fighting measures next week, risk assets — including bitcoin — could face renewed volatility. Central banks may also be cautious not to repeat the policy misjudgment of 2021–22, when inflation was initially dismissed as temporary before becoming a major global problem.

At the same time, a more cautious or wait-and-see tone from policymakers could support markets. If central banks emphasize data dependence or downplay inflation risks, investors may respond positively.

Ethan Harris, an economist and long-time observer of the Fed, noted that policymakers typically respond cautiously to energy-driven inflation shocks.

“Like all supply shocks, the first Fed response to an oil price spike is to watch and assess the damage,” Harris wrote in a LinkedIn post.

He explained that oil shocks often create a difficult policy trade-off because they tend to weaken economic growth while simultaneously pushing inflation higher.

“Before acting, the Fed wants to determine which risk is more serious,” he said, noting that many oil price spikes prove temporary. “The Fed does not want to adjust interest rates only to reverse course shortly afterward.”

Historically, decisions from the Federal Reserve — and occasionally the Bank of Japan — have had the greatest impact on bitcoin’s price movements.

With energy costs already placing pressure on households and businesses in Japan, the Bank of Japan’s policy decision next Friday could be particularly significant for both domestic financial markets and bitcoin.