What’s The Latest With The US-Iran War And How Does It Affect Bitcoin?

This came amid his revelation that he was close to ordering a strike against Iran earlier this week before postponing following pleas from leaders of the UAE, Qatar, and Saudi Arabia. Notably, the US-Iran war is now approaching the three-month mark, with a peace deal yet to be reached. Related Reading: Donald Trump Abandons Meme Coins In Favor Of These Indirect Bitcoin Exposure Vehicles The major contention remains Iran’s nuclear program, which the country has so far refused to give. Meanwhile, Iran had sent a revised proposal earlier in the week, which the US rejected. The proposal focused on a long-term truce in the US-Iran war and the gradual reopening of the Strait of Hormuz. The closure of this major oil chokepoint continues to impact the markets, with oil holding above 100 per barrel while Bitcoin and the broader crypto market decline. Meanwhile, amid the closure of the Strait of Hormuz, Iran has launched a Bitcoin-backed insurance service for shipping in this oil chokepoint. The service called “Hormuz Safe” aims to provide insurance policies for cargo moving through the Persian Gulf, the Strait of Hormuz, and surrounding waterways, with payments made in Bitcoin. Iran has adopted Bitcoin to evade US financial sanctions, which have heightened amid the US-Iran war. War Sending Inflation To Multi-Year Highs The US-Iran war is also driving US inflation to multi-year highs, which is putting downside pressure on Bitcoin and the broader crypto market. US PPI inflation rose by 6 year-over-year (YoY) in April, its highest increase since December 2022. At the same time, US CPI rose by 3.8 in April, its highest increase since May 2023. Related Reading: Why The 65,000 Region Is Important As Bitcoin Gears Up To Face Massive Resistance At These Levels With inflation rising due to the US-Iran war, the market continues to price in a rate hike over a cut as the Fed’s next likely move. Polymarket data shows a 28 chance of a Fed rate hike this year. Meanwhile, further data from Polymarket shows a 70 chance that the Fed will make zero rate cuts this year amid inflation concerns. A potential rate hike is bearish for Bitcoin, as it could constrain liquidity with higher interest rates. At the time of writing, the Bitcoin price is trading at around 77,000, up in the last 24 hours, according to data from CoinMarketCap. Featured image from Getty Images, chart from Tradingview.com