Why Bitcoin’s Price Is at a Weekly High Despite Middle East Tensions

Bitcoin is trading at its highest level in a week as tensions in the Middle East continue to weigh on stocks, while oil prices rise on concerns of a prolonged conflict.

The world’s largest cryptocurrency rose 2.6% to $71,500, a level not seen since March 6, recouping some of the losses since the US-Israeli conflict against Iran began on February 28, CoinGecko data showed.

Volatility linked to disruptions in the Strait of Hormuz, a narrow shipping corridor that handles roughly a fifth of global oil shipments, is keeping traders guessing whether the conflict can be resolved quickly.

US President Donald Trump said on Thursday that stopping Iran from acquiring nuclear weapons is a bigger priority than oil prices.

“The United States is by far the largest oil producer in the world, so when oil prices rise we make a lot of money,” Trump wrote in a Truth Social. after. “BUT, of far greater importance and importance to me, as President, is preventing an evil empire, Iran, from possessing nuclear weapons.”

The comments sent Brent crude futures up 9.2% to close above $100 a barrel for the first time since Russia invaded Ukraine in 2022.

It also marked the biggest single-day jump for the benchmark since the coronavirus pandemic began in May 2020.

Nic Puckrin, Coin Bureau co-founder and chief market analyst, said Declutter that prolonged oil shocks ultimately led to Bitcoin price weakness.

“The deciding factor for Bitcoin tends to be global liquidity,” Pickrin said. “At this point, investors appear to be pricing in a small disruption to long-term liquidity conditions, driven by the hope that the oil crisis will be short-lived.”

Still, expectations could change if the crisis is not brought under control and traders’ confidence in the White House does not increase messaging breaks down.

“In 2022, Bitcoin’s price decline was mainly driven by the Fed’s aggressive rate hike cycle to curb inflation,” Puckrin added. “If the same scenario plays out and global liquidity tightens, Bitcoin’s current strength could be undermined.”

Stock markets shuddered at the prospect of further disruptions to energy markets, sparking fears of one global recession.

The S&P 500 fell 1.52%, the Dow Jones fell 1.56%, while the tech-heavy Nasdaq, which includes AI companies that rely on a steady supply of energy, fell the most, with a drop of 1.73% to 24,533, according to data from Google Finance.

But so far, Bitcoin has remained resilient.

Ryan McMillin, chief investment officer at Merkle Tree Capital, said Declutter that Bitcoin’s recent strength versus stocks may reflect crypto-specific demand rather than a broader macro disconnect.

“Bitcoin’s strength versus stocks right now may reflect less of a macro disconnect and more of a structural demand shock rooted in the crypto market itself,” McMillin said.

He pointed to strong demand for Strategy’s preferred issue, STRC, which offers an 11.5% yield tied to Bitcoin exposure.

According to McMillin, the product has been attracting hundreds of millions of dollars in demand every day since revenues surged, with this influx ultimately translating into Bitcoin purchases.

Strategy announced earlier this week that it has purchased nearly 17,994 BTC, worth approximately $1.2 billion. Based on the pace of STRC issuance alone, McMillin estimates that the company has collected another 4,000 to 5,000 BTC in recent days.

“The potential demand for an 11.5% return product tied to Bitcoin exposure seems extraordinary,” he said, adding that flows of that size could lift not only Bitcoin but also the broader crypto market.

Still, McMillin cautioned that it is too early to conclude that Bitcoin has definitively broken with traditional risk assets.

He noted that the relationship between Bitcoin and stocks was at times inverse last year, when Bitcoin fell while stocks rose.

“For now, it looks more like crypto-specific capital flows are overwhelming the usual macro correlations,” he said.