Macro Investor Warns Bitcoin May Be Underpricing Risk of Prolonged Iran War

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.

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.

The US-Iran military conflict escalated to torpedo warfare in July 2026, with the United States claiming it had gained control of Iranian airspace within a week. The New York Times also reported that hundreds of US special operations troops had arrived in the Middle East. The fighting has increased energy and inflation risks, prompting markets to reassess whether Bitcoin can serve as “digital gold” when stocks, bonds and gold are under pressure.

As of July 19, Iran's president had rejected a US ceasefire demand, saying 14 million people were ready to defend the country. Oil rose 4% in a single day and 41% over nearly a month, while gold fell 9% over the same period. Bitcoin traded as low as a $66,000–$74,000 range before holding near $70,000. It declined less than US stocks, but its safe-haven status still requires longer-term validation.

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.

US Treasuries have long been regarded as a core safe-haven asset in the global financial system, with governments, central banks and financial institutions among their major holders. By linking Treasury purchases to support for US military action, Iran has politicized financial investment and prompted markets to reassess the ability of both Treasuries and Bitcoin to provide protection against wartime risks.

Iran’s parliament speaker recently warned that holders of US Treasuries could be designated as targets for military strikes. The warning pushed the benchmark 10-year Treasury yield above 4.4%, close to its highest level since August. Geopolitical risks also triggered a broader asset selloff, with Bitcoin falling below $104,000 and failing to decouple from traditional risk assets.