At the time, it seemed unimaginable that Bitcoin would one day dip below $100,000. Surging geopolitical tensions in the Middle East are driving invasion concerns and bigger crypto market crash panic. Iran’s Majlis has allegedly voted to close the Strait of Hormuz. This key chokepoint for global oil supply takes a broader toll by increasing the overall uncertainty in the region. The potential blockage has already been widely forecast to have a big effect on the bitcoin market.
U.S.-Iran tensions are worsening by the hour. Simultaneously, the Federal Reserve is about to make a historic decision that will probably lead to extreme market volatility. Ethereum, XRP and other large cryptocurrencies just fell off a cliff. Within a single day, they eroded $250 billion from the collective market cap.
The Strait of Hormuz is incredibly strategic given its status as one of the world’s most important chokepoints for oil tankers. Forcing a closure would shake the world’s energy supply and send shockwaves of economic damage across the globe.
"Escalation in the form of other countries getting involved and Iran blocking the Strait of Hormuz could lead to a further deterioration in global risk appetite and a rollback of [bitcoin’s] upward trend." - Alex Kuptsikevich, FxPro chief market analyst
Tracy Jin, chief operating officer of crypto exchange MEXC, considers a potential blockage of the Strait of Hormuz a "big risk to watch out for." Final approval of the closure will lie with Iran’s Supreme National Security Council. This comes on the heels of recent approval by the parliament.
"will be done whenever necessary" - Esmail Kosari, Iran lawmaker and Revolutionary Guards commander
Ongoing turmoil has resulted in greater scrutiny of a variety key market indicators as well as of risk mitigation practices. Investors should be prepared for more bad news to come as events develop.
Other factors influencing the cryptocurrency market include Donald Trump's recent confirmation of a "massive" crypto price game-changer and Coinbase's $130 billion "systemic" Bitcoin price warning. Forbes now publishes CryptoCodex, a new daily five-minute cryptomarket briefing, that is quickly becoming indispensable to traders, investors and the crypto-curious.
