Bitcoin Rally Stalls as Japanese Inflation Adds to Middle East Jitters
Bitcoin has rebounded from about $65,000 in late March, but the war in Iran has disrupted the Strait of Hormuz, a route for about 20% of the world's seaborne oil. That has heightened energy and inflation risks and depressed valuations for risk assets. Markets are also watching the long-term threat of quantum computers cracking early wallets, although analysts currently consider the risk manageable.
CoinDesk data on April 24 showed Bitcoin at about $77,800, below its April 23 high of $78,700 and down 0.6%. Ether traded at $2,300, down 0.8%. Japan's corporate services prices rose 3.1% year on year in March, above the 3.0% forecast, while core inflation climbed to 1.8% from 1.6%. WTI has gained more than 40% to $96 since the war began in late February, putting markets on alert for a hawkish shift by the Bank of Japan.
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The history behind this eventEscalating Middle East Conflict Rattles Markets, Puts Bitcoin at Risk of Falling Below $60,000
Iran's large-scale attacks on Israel and U.S. military bases in the Middle East have spilled over into energy and financial markets. Uncertainty has risen over oil supplies, shipping through the Strait of Hormuz and U.S. military involvement. For Bitcoin, a flight to the U.S. dollar and gold could weaken near-term price support.
Oil prices briefly jumped about 3% after the latest missile strikes, while Bitcoin fell to around $66,000 at one point. Analysts warned that the cryptocurrency could continue sliding toward the psychologically important $60,000 level if the dollar climbs to its highest since April 2025 and the conflict delays interest-rate cuts, as three Federal Reserve officials have warned.
Escalating U.S.-Iran Tensions Put Bitcoin and Oil Prices in Focus
A U.S. naval blockade of Iran has further escalated already strained relations between the two countries. Because the Persian Gulf is a vital global energy corridor, a broader conflict could lift crude oil prices and inflation expectations while weakening demand for risk assets. Markets are therefore closely watching the price response of Bitcoin (BTC), ether and solana.
Iran rejected peace talks scheduled for Friday, calling the U.S. military blockade an "act of war" and warning that it could retaliate against oil tankers. Iran also sent two letters of protest to the United Nations, accusing the United States of violating its sovereignty and demanding compensation from five Gulf states, including the United Arab Emirates. Reports showed oil prices rising as BTC, ether and solana fell in tandem.
Bitcoin Swings Sharply as Iran War Escalates, Rebounds to $67,000
Bitcoin is highly sensitive to global liquidity and risk appetite. The Iran war and the entry of Houthi forces have pushed up oil prices and inflation concerns, potentially forcing the U.S. Federal Reserve to delay interest-rate cuts. Keeping rates elevated would dampen demand for crypto assets and reduce the likelihood of Bitcoin testing $75,000 in the near term.
After fighting escalated on July 19, Bitcoin briefly fell below $65,200 and touched a low of $65,112. Buying returned after Asian markets opened, lifting the price to $67,400. Markets are also watching a weakening U.S. economy, stress in private credit and rising energy costs caused by the war, factors that could keep Bitcoin highly volatile.
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