Bitcoin (BTC) recovered from levels of 102 thousand 800 dollars to reach 107 thousand dollars again, thanks to institutional investors' bottom fishing and ETF inflows, despite the increasing geopolitical tensions in the Middle East.
Recently, global markets began to fluctuate following Israel's preemptive airstrike on Iran's nuclear facilities. While claims of the death of Hossein Salami, a key commander of the Islamic Revolutionary Guard Corps (IRGC), increased tensions, Tehran's harsh retaliation statements and the US's attempts to stay aloof from the events directed investors toward safe havens. Following these developments, gold and oil prices rose rapidly.
In this atmosphere, Bitcoin lost about 3% of its value, while Ethereum (ETH) dropped by about 9%, reflecting the unease in the overall market. Ahead of the Fed meeting scheduled for next week, investors took positions against downward risks, especially turning to put options on BTC. This situation indicates that the markets are still open to uncertainties.
Is an Oil Crisis Looming?
The most critical reflection of these developments is observed in the oil markets. Due to Iran's critical position in oil production, the risk of a potential blockade of the Strait of Hormuz is causing serious concerns in the markets. In such a scenario, energy prices are expected to rise rapidly, further triggering already high global inflation. This could lead the US Federal Reserve (Fed) to reconsider its interest rate decisions.
Another development that made this environment even more challenging was the major internet outage in the US. Problems experienced by important service providers such as Cloudflare and Google Cloud disrupted services like Spotify, Snap, Discord, and Google, negatively affecting technology stocks.
Despite all these uncertainties, institutional investor interest in Bitcoin continues. Most recently, DeFi Development Corp announced that it will purchase 5 billion dollars worth of Solana (SOL) to add to its corporate treasury, demonstrating ongoing confidence in major crypto assets.
