The week-long war between Iran, the US and Israel has pushed oil prices on both sides of the Atlantic to over $100 per barrel. barrel, which threatens to inject inflation into the global economy. Asian markets take a hit, bond yields rise, and yet bitcoin has barely budged and is hovering around $67,000 where it was 24 hours ago.
A probable cause? Bitcoin’s Strong Connections to Wall Street. Since the conflict started last week, U.S. stocks have held up relatively well against Asian and European stocks, likely benefiting from the U.S.’s position as a net oil exporter. Bitcoin, which closely follows US tech and Nasdaq moves, appears to have captured some of the same resilience.
“The US is not meaningfully exposed to oil from Iran, or more broadly, the Middle East,” JP Morgan CEO Kriti Gupta and Global Investment Strategist Justin Beimann said in a note to clients on Friday, noting the relative strength of US stocks.
They explained that the US imports oil mainly from Canada and Mexico, and only 4% from Saudi Arabia, and that it is now the world’s largest net oil exporter. This means that the US is largely insulated from disruptions to oil flowing through the Strait of Hormuz, while China and other Asian countries such as India and South Korea are hardest hit.
Markets price risks accordingly. Futures tied to the S&P 500 and the technology-heavy Nasdaq index have fallen just over 3% since the conflict began on February 28. Meanwhile, Asian stock indices have taken a beating. Japan’s Nikkei and India’s Nifty are down 10% and 5% respectively. South Korea’s Kospi is down over 16%.
Although bitcoin is a decentralized asset, it has slowly evolved into a quasi-American risk asset that increasingly moves in tandem with Wall Street, tech stocks and even the US dollar. This trend has accelerated since the debut of US spot ETFs, which made it easier for institutional investors to gain direct access to bitcoin.
The election of Donald Trump in late 2024 also added to the shift as markets responded to his promises of looser regulations and a more crypto-friendly political environment. Together, these developments have tied bitcoin more closely to US financial conditions, making it less of a purely global, borderless asset and more of a barometer of US risk appetite.
It shows that bitcoin is increasingly tied to US financial conditions, making it less of a purely global, borderless asset and more of a barometer of Wall Street’s risk appetite.
Another factor likely helping bitcoin is its oversold status. The cryptocurrency had already fallen to nearly $60,000 long before the conflict began, following weeks of profit-taking and broader market turmoil. This decline likely removed short-term sellers, leaving a relatively stable base for the digital asset.
Inflation may appear with a delay
The oil price increase may hit the wallets of US consumers with a delay, even though the US is largely energy independent.
“That doesn’t mean Americans are insulated from higher gas prices,” noted JPMorgan strategists Kriti Gupta and Justin Beimann. “Oil prices are still subject to global supply dynamics. But energy independence means there is a lag before price increases appear at the pump, making it easier to cope with short-term volatility.”
In other words, a protracted conflict or sustained oil rise could eventually filter through to consumer prices. Still, so far, the US market and bitcoin appear to be weathering the initial shock relatively unscathed.
