Geopolitical Tensions Push Oil Prices Up, Threatening Bitcoin’s Safe-Haven Status
Today, BeInCrypto examines how rising tensions between Israel and Iran in the Middle East are impacting Bitcoin (BTC), with the risk of further escalation potentially shaking the entire crypto market and investor portfolios.
Iran’s Attack Could Push US Inflation to 5%
Recent US Consumer Price Index (CPI) data showed inflation cooling to 2.4% in May—below market expectations of 2.5%—buoyed by positive US-China trade talks. However, JPMorgan warns that if Israel attacks Iran, US inflation could spike to 5%, largely driven by surging oil prices.
Iran, a major oil producer and the third-largest in OPEC, exports about 1.5 million barrels daily. Disruptions to its oil supply could create a global shortage, with JPMorgan projecting oil prices could soar to $120 per barrel.
Oil prices already jumped 4% on June 11 amid escalating Middle East tensions, coinciding with reports that the US is preparing to evacuate its embassy in Iraq due to security concerns.
Rising Oil Prices Could Reverse Fed Rate Cut Expectations
The last time oil surged—following the 2019 Saudi Aramco attack—prices spiked 14-20%. With President Trump prioritizing lower energy costs to tame inflation, a surge to $120 oil might force the Federal Reserve to reconsider planned rate cuts later this year.
According to The Kobeissi Letter, “An attack pushing oil prices to $120 will bring interest rate hikes back on the table.”
Higher US rates typically weigh on Bitcoin prices by tightening liquidity and raising borrowing costs, pushing investors toward traditional safe havens like bonds—similar to 2022 when Bitcoin fell from $47,000 to below $20,000.