A safe haven?
The stock is volatile, but Bitcoin for now, it continues to hold just above $70,000, even as other risk assets sell off across the board.
Helping to drive down inventories, crude oil prices have risen more than 10% and are approaching $100 a barrel on concerns over the Strait of Hormuz – a key shipping route for oil tankers.
“Stopping Iran concerns me more than oil prices,” President Trump said Thursday. Meanwhile, in her first public statement since becoming Iran’s supreme leader, Mojtaba Khamenei said the Strait of Hormuz should remain closed.
“It is becoming clear to everyone that the strait is far from under control and potentially impossible to control without severe concessions to Iran, troops on the ground or enormous military risks,” said Quinn Thompson, founder of Lekker Capital. “Things get dicey from here and when our backs are against the wall, volatility increases.”
Around midday on the East Coast, the Nasdaq is near session lows, down 1.6% and the S&P 500 is down 1.2%.
Erased from the headlines thanks to Iran, lingering concerns about a collapse in private credit remain a major source of concern. Morgan Stanley (MS) was the latest in a growing series of financial giants to cap buybacks – this one as part of its $8 billion North Haven Private Income Fund. Shares of Morgan Stanley fell 4% on Thursday, leading a decline in the financial sector. JPMorgan, Citigroup and Wells Fargo were down nearly 3%.
In the private equity sector, KKR, Apollo Global and Ares Management all saw declines of 3% to 4%.
Gold, meanwhile, fell 0.6% and the 10-year U.S. Treasury yield rose three basis points to 4.23%.
Oil stimulates markets
Oil has become the main driver of crypto prices, according to James Butterfill, head of research at CoinShares. “The dominant variable in the valuation of global assets is no longer the labor market. It is oil — and the geopolitical crisis that underpins it,” he said in a note. He argued that the government’s latest U.S. jobs report, which fell short of expectations, would normally have caused markets to anticipate faster rate cuts from the Federal Reserve, but the reaction was muted, with investors instead focusing on rising energy costs linked to the Middle East conflict.
Despite Thursday’s pullback, bitcoin remained relatively resilient amid rising geopolitical tensions and broader market uncertainty, holding near the $70,000 level even as investors reassess global risks.
The reason could be that large investors are increasingly looking for more than just exposure to the price of Bitcoin, according to Dom Harz, co-founder of layer 2 blockchain BOB. “Institutions want more than exposure to Bitcoin and are increasingly seeking infrastructure designed to unlock the financial utility of Bitcoin,” he wrote in a note, highlighting growing interest in Bitcoin-based financial applications that could allow users to spend, save and earn using the network.
