The week-long war between Iran, the United States and Israel has sent oil prices on both sides of the Atlantic above $100 a barrel, threatening to inject inflation into the global economy. Asian markets are taking a hit, bond yields are rising, and yet bitcoin it has barely moved, hovering around $67,000, where it was 24 hours ago.
A probable reason? Bitcoin’s strong ties to Wall Street. Since the conflict began last week, US stocks have held up relatively well compared to Asian and European stocks, likely benefiting from the US’s position as a net oil exporter. Bitcoin, which closely follows the movements of US technology and the Nasdaq, seems to have captured some of that same resilience.
“The United States is not significantly 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, highlighting the relative strength of US stocks.
They explained that the United States imports oil mainly from Canada and Mexico, and only 4% from Saudi Arabia, and is now the largest net oil exporter in the world. This means that the United States 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 are pricing risks accordingly. Futures linked to the S&P 500 and the Nasdaq technology 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 have fallen 10% and 5%, respectively. South Korea’s Kospi is down more than 16%.
Although bitcoin is a decentralized asset, it has slowly evolved into a quasi-American risk asset, increasingly moving in lockstep 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 directly access bitcoin.
The election of Donald Trump in late 2024 also contributed to the shift, as markets reacted 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 that is likely helping Bitcoin is its oversold status. The cryptocurrency had already fallen to almost $60,000 long before the conflict began, following weeks of profit-taking and broader market jitters. That drop likely eliminated short-term sellers, leaving a relatively stable foundation for the digital asset.
Inflation could appear late
Rising oil prices could belatedly hit American consumers’ wallets, even though the United States is largely energy independent.
“That doesn’t mean Americans are protected from rising gasoline prices,” said JPMorgan strategists Kriti Gupta and Justin Beimann. “Oil prices are still subject to global supply dynamics. But energy independence means there is a delay before price increases appear at the pump, making it easier to weather short-term volatility.”
In other words, a prolonged conflict or a sustained rise in oil could eventually trickle down to consumer prices. Still, for now, the US market and bitcoin appear to be emerging relatively unscathed from the initial shock.
