Bitcoin Under Pressure? What US Control of Strait of Hormuz Could Mean for BTC and Oil
The escalating US-Iran conflict is once again putting the global energy market under pressure, with the Strait of Hormuz emerging as a major flashpoint for oil prices and financial markets. US President Donald Trump has claimed that the strategically important waterway is now “New US Territory,” raising fresh concerns about oil supplies, inflation and the future direction of Bitcoin.
The claim does not, by itself, mean that the Strait of Hormuz has legally become US territory. However, it has intensified questions over what further military escalation around one of the world's most important oil chokepoints could mean for crude prices, global liquidity and cryptocurrencies.
Why the Strait of Hormuz Matters to Global Markets
The Strait of Hormuz is a critical route for global energy trade. Any prolonged disruption can put pressure on oil supplies and push crude prices higher. Recent tensions have already kept oil prices elevated, with Brent crude moving above $90 a barrel amid uncertainty over shipping through the waterway.
Trump's latest claim comes at a time when tensions between Washington and Tehran remain high and negotiations have stalled. Iran has maintained that the waterway will not return to normal commercial activity until its demands are addressed, while the US continues to maintain military pressure in the region.
What Could Happen to Bitcoin if Oil Reaches $100?
A further escalation that pushes crude oil from current levels toward $100 per barrel could initially weigh on Bitcoin.
The reason is that a sharp rise in energy prices can increase inflation expectations. During periods of geopolitical stress, investors often reduce exposure to riskier assets and move money toward traditional safe-haven investments such as gold and short-term US Treasuries. Bitcoin, which often behaves like a high-beta risk asset, could therefore face selling pressure.
However, the relationship is not straightforward. If an energy crisis significantly weakens the purchasing power of traditional currencies, some investors could instead turn toward Bitcoin as a non-sovereign, limited-supply asset. This means the cryptocurrency's reaction could depend heavily on the broader liquidity and monetary-policy environment.
The Federal Reserve Could Become the Key Factor
The biggest transmission channel from oil prices to Bitcoin could be US inflation and Federal Reserve policy.
If crude remains expensive for an extended period, higher energy costs could add to inflation. That could make it harder for the Federal Reserve to cut interest rates aggressively. Higher borrowing costs generally reduce liquidity and can encourage investors to move away from speculative assets, including cryptocurrencies.
On the other hand, if tensions ease, oil prices retreat and inflation expectations moderate, markets could again price in a more supportive monetary-policy environment. That could provide Bitcoin with a stronger backdrop.
Bitcoin Remains in a Narrow Trading Range
According to TradingView data cited by Coin Edition, Bitcoin was trading around $64,775 at the time of its report, after gaining 1.27% following an earlier decline of 0.63%. The report noted that BTC remained in a sideways trading channel and could require a significant catalyst to break out of that range.
The latest market action also shows why investors are closely watching developments in the Middle East. Oil prices have continued to react to uncertainty surrounding the Strait, with Brent recently closing around $91 a barrel.
What Investors Should Watch Next
The direction of Bitcoin may ultimately depend on more than Trump's statements about the Strait of Hormuz. Investors will likely be watching four key factors:
Brent crude oil prices
US inflation expectations
Federal Reserve interest-rate policy
Global market liquidity and risk appetite
If oil prices continue rising while inflation and interest-rate concerns intensify, Bitcoin could face additional pressure. But a de-escalation in the region, falling oil prices and improving liquidity could provide support to BTC.