After a week of tension between Iran, the United States and Israel, oil prices have risen above $100 per barrel on both sides of the Atlantic. While this sharp rise in energy costs increased concerns that global inflation pressure may strengthen again, sales deepened in Asian stock markets and bond yields rose. On the other hand, Bitcoin moved limitedly at around $67,000 and remained relatively flat in the last 24 hours.
Bitcoin’s ties with US markets are strengthening
One of the main reasons for this divergence in the market is that Bitcoin has recently started to move more strongly in line with Wall Street. US stocks have remained more resilient than Asian and European markets since the conflict began. Bitcoin, which has a high correlation with technology stocks and the Nasdaq index, also found support from this outlook. Bitcoin, which emerged as a decentralized asset, appears to be priced more and more clearly in line with the US risk appetite as institutional investment flows increase.
US energy position provided buffer to markets
The fact that the USA is a net oil exporter was among the important factors shaping this picture. While the country imports most of its oil from Canada and Mexico, it is less exposed to supply disruptions from the Middle East compared to economies such as China, India and South Korea. This has relatively mitigated the initial impact of risks around the Strait of Hormuz on US assets. Since the end of February, the decline in S&P 500 and Nasdaq futures has fallen by just over 3 percent, while Japan’s Nikkei index has fallen by nearly 10 percent, India’s Nifty index by 5 percent and South Korea’s Kospi index by more than 16 percent.
JPMorgan managers Kriti Gupta and Justin Beimann assessed that the U.S. is not significantly dependent on Iranian and Middle Eastern oil in general, so U.S. stocks have been able to maintain their relative strength.
Spot ETFs and political expectations had an impact
The introduction of spot Bitcoin ETFs played an important role in pricing Bitcoin closer to US financial conditions. These products have made it easier for institutional investors to access Bitcoin through direct and regulated channels. In addition, expectations that US President Donald Trump will introduce looser regulations and a policy framework closer to crypto assets after the 2024 elections also affected the market perception. Thus, while Bitcoin retains its identity as a global and borderless digital asset, it has increasingly begun to be traded as an indicator of US-centric financial sentiment.
Another factor that was seen as influential in the price behavior was that Bitcoin was already weakened before the conflict started. Cryptocurrency has retreated to the level of 60 thousand dollars in recent weeks due to profit realizations and general market unrest. It is thought that this decline cleared a significant part of the short-term sellers from the market and created a more stable base. Therefore, a sharp second selling wave did not occur in Bitcoin during the first phase of the geopolitical shock.
However, it seems too early to say that the effect of the rise in energy prices has completely disappeared. Although the USA has a more independent structure in terms of energy, fuel costs may be reflected on consumers over time, as oil is priced in line with the global supply and demand balance. The fact that the reaction in the markets was limited in the first stage does not mean that inflation pressure will not be felt in the medium term.
Kriti Gupta and Justin Beimann of JPMorgan emphasized that energy independence does not completely protect Americans from high fuel prices, but the delayed effect of price increases at the pump makes it easier to manage short-term volatility.
In this context, a prolonged conflict or a permanent rise in oil prices may affect both consumer prices in the USA and the course of risky assets more significantly in the future. For now, while the US markets have survived the first blow with limited damage, Bitcoin seems to have largely absorbed this shock, similar to Wall Street.
