The price of #البيتكوين fell to $99,800 after the Iranian parliament approved a proposal to close the Strait of Hormuz. This move comes following the U.S. bombing of Iranian nuclear sites yesterday.
With the final approval from the Supreme National Security Council pending, markets brace for heightened energy disruption risks. Given the importance of the Strait of Hormuz for global oil supplies, a macroeconomic shock of this magnitude could lead to significant disruption in the cryptocurrency market.
Impact of the potential closure of the Strait of Hormuz
In addition to Bitcoin, Ethereum dropped 4% to below $2,200, and $XRP fell below $2 for the first time since April. Cryptocurrency liquidations totaled $950 million in the last 24 hours, reflecting a deep risk-averse sentiment.
Bitcoin price drops below $100,000.
But why? Approximately 25% of global oil shipments pass through the Strait of Hormuz. Closing this vital point would immediately tighten global energy supplies.
Oil prices may rise, leading to increased inflation and delaying interest rate cuts by central banks.
As a result, high energy costs will spread throughout economies. Consumers will face higher fuel bills, while businesses struggle with rising transportation and production costs.
In response, investors typically turn to safe havens like U.S. Treasury bonds and the dollar, leading to capital outflows from high-risk assets like cryptocurrencies.
Global oil supplies through the Strait of Hormuz.
Furthermore, inflationary pressures stemming from energy would challenge the Federal Reserve's 2% target. If the Fed signals further tightening, real yields may rise.
Historically, higher real yields negatively affect Bitcoin by increasing the opportunity cost of holding non-yielding assets.
Cryptocurrency market risks and macroeconomic linkages
The recent sell-off in cryptocurrencies reflects broader market pressures. Liquidations were concentrated in long positions across Bitcoin and Ethereum. The rise in the VIX index and widening yield spreads on Treasury bonds indicate a tightening of risk budgets.
Additionally, hedge funds and individual traders often use leverage in cryptocurrencies. Sharp price movements lead to margin cover requests, exacerbating declines.
With current leverage metrics rising, further declines are likely if uncertainty persists.
At the same time, the strength of the dollar is typically associated with weakness in cryptocurrencies. A rise in the U.S. dollar index could deepen Bitcoin's losses, potentially pushing it towards $95,000.
Forecasts and leading indicators
Traders should closely monitor three developments:
The Supreme National Security Council's decision: the final vote on closing the Strait of Hormuz.
Oil prices: exceeding $100 per barrel may exacerbate inflation.
Federal Reserve signals: comments on interest rate policy in response to energy shocks.
Overall, the potential closure of the Strait of Hormuz by Iran raises macroeconomic risks for cryptocurrencies.
If approved, expect ongoing pressures on Bitcoin and broader digital asset markets until geopolitical clarity and energy stability return.
