- Iran approves Hormuz closure plan after U.S. airstrikes on nukes.
- Bitcoin drops 3.5% as crypto markets react to war tensions.
- Oil prices may surge; JPMorgan predicts $130 per barrel soon.
After the recent U.S. airstrikes on Iran’s nuclear sites, tensions in the Middle East have quickly escalated. As a result, Iran’s parliament has approved a plan to close the Strait of Hormuz. This strait is one of the world’s most important oil routes, carrying about 25% of global oil shipments. However, it is still up to the Supreme National Security Council of Iran to decide. Despite this, the news has already worried everyone in the financial markets around the globe.
Crypto Market Reacts as Bitcoin Drops 3.5% Below $98K
After the announcement, the rate of large cryptocurrencies plummeted. The bitcoin dropped by 3.5%, below 98,400. Ethereum declined by 9% and slipped below the $2,185 mark, whereas XRP fell by 6% and touched $1.96. Such response indicates that investors have been concerned with the escalating conflict, and they are withdrawing funds in risky investments. The fall of Bitcoin influenced the other part of the crypto world. The altcoins such as Solana and XRP lost track. Crypto being a 24/7 market tends to be the first to respond to world events particularly during weekends when regular markets are not operational.
In the same meantime, the oil market has also showed a strong response. JPMorgan analysts have now foresight that the price of oil may soar to up to 120 or 130 dollars per barrel. In such a case, US inflation could increase to 5%, the highest since March 2023. By that time, the Federal Reserve had not ended the rise in interest rates to combat increasing prices. Therefore, a new wave of increasing oil prices would complicate the life of the central banks all over the world.
It was fierce military action. According to General Dan Caine, the chairman of the Joint Chiefs of Staff, it took the B-2 seven bombers 18 hours of flight to the U.S. to Iran. They employed 14 bunker-buster bombs on three nuclear facilities, namely Fordow, Natanz and Isfahan. The airstrikes were then confirmed to be successful by President Donald Trump. He said on Truth Social X that all the aircrafts safely landed and added that now was time to be at peace. His message indicated that the strikes were to halt the Iran nuclear activity and not to wage war.
Bitcoin Shows Resilience Despite Geopolitical Shock
Despite this, U.S. officials have issued strong warnings. The Defense Secretary Pete Hegseth asserted that the U.S will protect its men should Iran retaliate with missiles. He also clarified that the mission had nothing to do with changing Iran government but preventing nuclear threats. In an interview in the Meets the Press program in the NBC channel, the vice-president JD Vance maintained that the U.S is not at war with Iran; war is only against its nuclear program.
Some capitalists remain optimistic about Bitcoin regardless of the decrease in the prices. It is helpful in turbulent times because it can be supplied in limited quantity and does not depend in governments. Others consider it to be the digital gold. They feel that even the world economy is at risk, Bitcoin has the capability to save the value. Consequently, prices did go down although they did not go down as much as it had been anticipated. This demonstrates the fact that Bitcoin is more and more stable and accepted.
Lastly, the U.S.-Iran war vibrated traditional and digital markets. The prices in oil can break and become very high, inflation might come back, and cryptocurrencies are struggling. Meanwhile, the increasing performance of Bitcoin as a safe-haven asset demonstrates the scope of the changes in the world of financial assets.