The last four weeks have been brutal for Bitcoin traders as prices continue to follow comments from President Donald Trump, who can’t make up his mind on Iran.
One day he talks about peace and BTC and risk assets rise while oil falls, the next day he talks hawkishly again, causing BTC to fall and oil to rise. Meanwhile, Iran declares the Strait of Hormuz “closed forever” and analysts offer extremely bullish and bearish oil targets. It is almost impossible to navigate in this unstable environment.
Traders might be better off focusing on the following real indicators that actually matter. Unfortunately, these do not paint a positive picture for risky assets, including Bitcoin.
The SPR cliff in mid-April
The fate of the global economy and risk assets could depend on the coming weeks, as a managed oil disruption threatens to become an unmanaged disruption.
After the war in Iran began on February 28, tanker traffic through the crucial Strait of Hormuz, which handles about 20 percent of the world’s maritime oil trade, virtually collapsed. In response, the International Energy Agency’s 32 member countries agreed to the largest coordinated strategic stockpile release in its 50-year history – about 400 million barrels, then increased to 426 million as more countries joined in.
These emergency barrels compensated for a supply deficit of approximately 4.5 to 5 million barrels per day, a deficit created by the virtual cessation of flows from Hormuz.
But these reserves are now expected to reach their limit in the coming weeks, in which case this manageable deficit could double to around 10 to 11 million barrels per day – the expected shortfall due to depletion of reserves and disruption of normal flows.
The House of Saud described it as “a shock of unprecedented scale, with no obvious buffer to absorb it.”
So it doesn’t matter whether Trump continues or stops the war against Iran. If oil supplies are not substantially restored over the next couple of weeks, we could see massive risk aversion in crypto and traditional financial markets.
Ship insurance premiums via Hormuz
A ship insurance premium is the payment that a ship owner makes to an insurance company to protect against financial losses that may arise during the operation of the vessel.
Insurance costs for shipping through the Strait of Hormuz have increased significantly, with reports indicating that rates have increased from less than 1% of the ship’s value before the war to 7.5% per voyage. This means that a $100 million ship now has to pay between $2 million and $3 million in insurance, compared to $250,000 before the conflict.
When premiums fall below 2%, it is the clearest sign that the road is truly safer and it is time to take risks in the markets again. No press conference, briefing, or Truth Social message from Trump can replicate the certainty inherent in these prices.
Tanker traffic
Trump has sometimes suggested this passage through the Strait of Hormuz can be assured, but so far there is no clear evidence that tanker traffic has returned to near-normal volumes.
In fact, only 21 tankers have transited Hormuz since the war began, compared to more than 100 ships daily before the conflict, according to S&P Global Market Intelligence.
A sustainable rally in risk assets requires this figure to increase significantly; until then, Trump’s attempts to calm markets may be short-lived.
