Bitcoin’s price has been volatile over the past week as traders prepare for a possible sharp market shock.
The latest Israel-Iran conflict pushed bitcoin down close to $100,000 per coin, with a warning from Coinbase adding pressure. Despite a brief rebound, experts now warn that rising tensions around the Strait of Hormuz, a crucial oil passage, could trigger new crypto market swings.
Tracy Jin, COO of crypto exchange MEXC, explains that about 20% of the world’s oil passes through the Strait of Hormuz. Any conflict there could cause energy prices to surge, pushing inflation higher and leading investors to move away from risky assets like crypto and stocks.
Because bitcoin trading has become closely tied to broader economic factors, this could cause fresh volatility in the crypto market.
Higher energy costs would also affect bitcoin miners, who require a lot of power to run their computers, potentially increasing mining expenses and impacting bitcoin’s supply dynamics.
Prediction markets show a 40% chance that Iran might close the Strait of Hormuz, a move that could deepen instability. Meanwhile, former U.S. president Donald Trump has downplayed hopes for a peace deal between Israel and Iran.
Still, some analysts remain optimistic. Markus Thielen, CEO of 10x Research, says bitcoin is likely to stay resilient. Long-term holders are reportedly accumulating more bitcoin rather than selling, signaling confidence despite market uncertainty.
