By Bitcoin held near $77,600 on Monday as renewed U.S.-Iran military tensions pushed oil prices higher and U.S. stocks lower, showing limited reaction to the latest geopolitical escalation.
The Bitcoin price was around $77,580 during Asian trading hours, little changed from midnight UTC, according to CoinDesk. The cryptocurrency had nevertheless gained about 23% in August, outperforming gold and the Nasdaq, which rose about 9% and 4%, respectively, over the month.
The relative stability in Bitcoin contrasted with moves in other markets after U.S. forces attacked Iranian rocket launchers on Larak Island in the Strait of Hormuz. Iran responded with attacks on U.S. positions in the region, adding to concerns over energy supplies and shipping through the strategic waterway.
Oil prices rose sharply following the renewed fighting. Brent crude settled at $90.49 a barrel, up $2.39, or 2.7%, while U.S. West Texas Intermediate crude rose $2.36, or 2.8%, to $85.76.
The Strait of Hormuz is a major route for global oil shipments, making any threat to shipping through the waterway a potential source of higher energy prices and inflation.
U.S. stocks also came under pressure. The S&P 500 fell 0.3% on Monday, while the Dow Jones Industrial Average dropped 0.7% and the Nasdaq declined 0.1%, according to Associated Press data. Despite the losses, all three major indexes ended August higher.
The muted reaction in the Bitcoin price came after a month in which the cryptocurrency had performed strongly despite renewed concerns over inflation, interest rates and geopolitical risk.
CoinDesk attributed Bitcoin’s August performance partly to continued inflows into spot Bitcoin exchange-traded funds and expectations that U.S. policymakers could provide support to financial markets through Treasury bond purchases.
Bitcoin’s behaviour has also renewed debate over its role during periods of geopolitical stress. The cryptocurrency has sometimes been described by investors as an alternative asset, but its trading history has also shown periods of correlation with technology stocks and other risk-sensitive assets.
Monday’s market reaction offered a mixed picture. While Bitcoin remained relatively stable, gold fell 0.8% to about $4,418 an ounce, according to CoinDesk. Nasdaq futures were down about 0.5%, while Asian equities also declined.
Other major cryptocurrencies were weaker. XRP fell 0.8%, while Solana declined 0.6%.
The latest moves came as investors also assessed the outlook for U.S. interest rates.
Federal Reserve Chair Kevin Warsh said in a speech at the Jackson Hole economic symposium on Friday that inflation remained insufficiently contained and that financial conditions were not restrictive enough, according to CoinDesk. His comments prompted markets to increase expectations for a September interest-rate increase.
Higher interest rates can weigh on speculative assets because they increase the relative attractiveness of interest-bearing investments and can reduce liquidity available for riskier assets.
The combination of geopolitical tensions, higher oil prices and uncertainty over monetary policy could therefore remain important for the Bitcoin price in the coming days.
Investors are also awaiting the U.S. employment report due on Sept. 4, which could provide further clues about the Federal Reserve’s next policy decision.
Vikram Subbaraj, chief executive of India-based cryptocurrency exchange Giottus, advised investors to limit the use of leverage while macroeconomic uncertainty remains elevated.
“Investors should avoid aggressive leverage while macro uncertainty remains high,” Subbaraj said in an email, according to CoinDesk. He identified support for Bitcoin near $77,000 and a resistance range between $79,400 and $80,800 ahead of the U.S. jobs report.
The oil market remains particularly sensitive to developments in the Middle East. Reuters reported that shipping activity through the Strait of Hormuz has been affected by the conflict, while oil shipments have recovered from earlier lows but remain below pre-war levels.
The United States has also been working to manage the potential impact on domestic energy supplies. The U.S. Strategic Petroleum Reserve fell by 3.1 million barrels in the final week of August to 286.6 million barrels, its lowest level since 1982, according to U.S. Energy Department data reported by Reuters.
For cryptocurrency investors, the latest episode provides another test of whether Bitcoin can maintain its recent resilience as global markets respond to geopolitical and monetary-policy risks.
For now, the Bitcoin price remains close to $78,000, even as oil has climbed above $90 a barrel and U.S. equities ended August under pressure. The next major market catalyst is likely to be the U.S. jobs report, alongside developments in the U.S.-Iran conflict and their impact on energy markets.
