Why Bitcoin Has Reached Its Highest Point This Week Even Amid Middle East Unrest

Bitcoin Surges Amid Middle East Unrest and Rising Oil Prices

Bitcoin has reached its highest price in a week, buoyed by ongoing instability in the Middle East that continues to impact stock markets. Meanwhile, oil prices are climbing due to fears that the conflict may persist.

The leading cryptocurrency has risen 2.6% to $71,500, a value not seen since early March. According to CoinGecko, Bitcoin has recovered some of the losses suffered since the U.S.-Israel tensions with Iran began at the end of February.

Uncertainty surrounding the Strait of Hormuz—a crucial shipping route responsible for about 20% of global oil transport—has fueled speculation about whether the conflict will be resolved quickly.

U.S. Policy and Oil Market Reactions

On Thursday, U.S. President Donald Trump emphasized that preventing Iran from obtaining nuclear weapons takes precedence over oil prices. He stated on Truth Social, "The United States is the world's largest oil producer, so higher oil prices benefit us financially. However, my primary concern as President is stopping Iran from acquiring nuclear weapons."

Trump's remarks pushed Brent crude futures up by 9.2%, closing above $100 per barrel for the first time since Russia's invasion of Ukraine in 2022. This also marked the largest single-day increase for Brent since the onset of the COVID-19 pandemic in May 2020.

Expert Insights on Bitcoin and Oil Shocks

Nic Puckrin, co-founder and chief market analyst at Coin Bureau, told Decrypt that extended oil price shocks have historically led to weakness in Bitcoin's value.

He explained, "Global liquidity is typically the main driver for Bitcoin. At the moment, investors seem to expect minimal long-term disruption to liquidity, hoping the oil crisis will be resolved soon."

However, Puckrin warned that if the crisis escalates and confidence in the White House's communication falters, expectations could shift rapidly.

He added, "In 2022, Bitcoin's decline was largely caused by the Federal Reserve's aggressive interest rate hikes to combat inflation. If a similar tightening of global liquidity occurs, Bitcoin's current momentum could be threatened."

Stock Market Response and Bitcoin's Resilience

Stock markets have reacted nervously to potential further disruptions in energy supplies, raising concerns about a possible worldwide recession.

• S&P 500 dropped 1.52%
• Dow Jones fell 1.56%
• Nasdaq, which includes many AI firms dependent on stable energy, declined 1.73% to 24,533, according to Google Finance

Despite these declines, Bitcoin has remained strong.

Crypto-Specific Demand Fuels Bitcoin

Ryan McMillin, chief investment officer at Merkle Tree Capital, told Decrypt that Bitcoin's recent outperformance compared to stocks may be driven by unique demand within the crypto sector, rather than a broader separation from macroeconomic trends.

He highlighted strong interest in Strategy’s preferred issuance, STRC, which offers an 11.5% yield linked to Bitcoin. Since the yield increase, STRC has seen daily inflows of hundreds of millions of dollars, resulting in significant Bitcoin purchases. Strategy recently disclosed buying nearly 20,000 BTC, and McMillin estimated an additional 4,000 to 5,000 BTC may have been acquired in recent days.

"The demand for an 11.5% yield product tied to Bitcoin is remarkable," McMillin said, noting that such large inflows can boost not only Bitcoin but the wider crypto market.

Nevertheless, McMillin cautioned that it is premature to declare Bitcoin has fully decoupled from traditional risk assets. He pointed out that last year, Bitcoin and equities sometimes moved in opposite directions, with Bitcoin falling while stocks rallied.

"At present, it appears that crypto-specific capital flows are overshadowing typical macro correlations," he concluded.