Bitcoin prices held steady against broader market declines on Monday following escalation of the war in Iran.
QCP Capital released a market update outlining how traditional safe-haven assets struggled amid surging crude oil costs. Conversely, despite the widespread pressure on traditional risk assets, bitcoin displayed notable strength, rising 3.3% in early trading hours to $69,400.
The conflict in Iran escalated over the weekend, raising market concerns regarding a prolonged conflict and broader instability across the Middle East. Consequently, fears of sustained supply disruptions through the Strait of Hormuz– which is the primary shipping route for roughly a quarter of the world’s oil – drove crude oil prices above $115 per barrel on Monday.
Global equity markets quickly turned defensive in response to the rising geopolitical uncertainty. This broad-based market stress pushed the VIX volatility index above 30 as traders and investors grapple with the turbulence.
Traditional safe-haven assets failed to attract their usual bids during this period of market stress. United States Treasuries came under pressure as surging crude prices pushed yields higher, and gold fell by 1.3% shortly after market open. Meanwhile, the USD rose slightly in early trading hours on Monday.
The strength of the dollar is heavily supported by rising Treasury yields. Furthermore, the position of the United States as a net energy exporter provided additional backing for the currency during the oil price spike.
Header image by Jakub Żerdzicki via Unsplash.
