The week-long war between Iran, the United States and Israel has pushed oil prices on both sides of the Atlantic beyond $100 a barrel, threatening to inject inflation into the global economy. Asian markets suffer, bond yields rise, and yet Bitcoin has barely moved, hovering around $67,000, where it was 24 hours ago.
A probable reason? Bitcoin’s Close Ties to Wall Street. Since the conflict began last week, U.S. stocks have held up relatively well compared to Asian and European stocks, likely benefiting from America’s position as a net exporter of oil. Bitcoin, which closely follows the movements of US Tech and the Nasdaq, appears to have acquired some of that same resilience.
“The United States does not have significant exposure to Iranian oil or, more broadly, the Middle East,” JP Morgan Executive Director Kriti Gupta and global investment strategist Justin Beimann said in a note to clients on Friday, highlighting the relative strength of U.S. stocks.
They explained that the United States imports oil mainly from Canada and Mexico, and only 4% from Saudi Arabia, and is now the world’s largest net exporter of oil. This means that the United States is largely safe from disruptions to oil flowing through the Strait of Hormuz, while China and other Asian countries, such as India and South Korea, are most affected.
Markets price risks accordingly. Futures contracts linked to the S&P 500 and the Nasdaq Technology Index are down just over 3% since the conflict began on February 28. Meanwhile, Asian stock indexes took a beating. Japan’s Nikkei and India’s Nifty fell 10% and 5%, respectively. South Korea’s Kospi fell more than 16%.
Although bitcoin is a decentralized asset, it has slowly evolved into a quasi-American risk asset, moving increasingly in lockstep with Wall Street, tech stocks and even the US dollar. This trend has accelerated since the debut of spot ETFs in the United States, which gave institutional investors easier and direct access to bitcoin.
The election of Donald Trump in late 2024 also contributed to this 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 U.S. financial conditions, making it less of a purely global, borderless asset and more of a barometer of U.S. risk appetite.
This shows that bitcoin is increasingly tied to U.S. 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 could help Bitcoin is its oversold status. The cryptocurrency had already fallen to nearly $60,000 well before the conflict began, following weeks of profit-taking and broader market nervousness. This drop likely eliminated short-term sellers, leaving a relatively stable base for the digital asset.
Inflation could appear late
The surge in oil prices could hit the wallets of American consumers with some delay, even though the United States is largely energy independent.
“This does not mean that Americans are immune to rising gas prices,” noted JPMorgan strategists Kriti Gupta and Justin Beimann. “Oil prices remain subject to global supply dynamics. But energy independence means there is a lag before price increases appear at the pump, making it easier to deal with short-term volatility.”
In other words, a prolonged conflict or sustained oil surge could eventually impact consumer prices. Yet, for now, the US market and Bitcoin appear to have survived the initial shock relatively unscathed.
