News on June 19

Crypto Market

• Bitcoin: The price of Bitcoin is maintaining above $100,000 despite the ongoing Israel-Iran war. However, the direction of the market remains uncertain as the conflict could put pressure on inflation and reduce risk appetite.

• Correlation: Bitcoin has a positive correlation with stocks (risk-on) compared to gold (risk-off), with a correlation coefficient of +0.61 with Nasdaq Composite and -0.07 with gold.

• Price Prediction: Analysts from QCP Capital warn that the conflict in the Strait of Hormuz could drive oil prices up and severely impact risk markets, including Bitcoin.

US Economy

• Inflation: US CPI inflation is forecasted to reach 5% if Israel attacks Iran, which may prompt the Fed to raise interest rates and affect the value of Bitcoin.

• Interest Rates: The Fed is expected to keep interest rates unchanged, but this decision will depend on current economic indicators and the need for monetary stimulus.

Market Impact

• Escalation: The escalation of the Israel-Iran conflict could lead to oil shortages, pushing oil prices up to $120 and tightening liquidity, causing investors to shy away from risk assets like Bitcoin.

• Investor Sentiment: Retail investor sentiment towards Bitcoin is very positive, with a ratio of 2:1 between optimistic and pessimistic comments — the highest since November 2024.