Bitcoin aims for a new high against the dollar
Despite some investors taking profits, upward momentum for Bitcoin remains strong. It is on the brink of reaching a new all-time high.
A wide-screen illustration in the style of a 1970s comic book shows a young crypto trader alone in a dark, cool-toned office. He leans forward, holding his head in frustration.
His face is lit by a large, bright orange screen featuring a BTC/USD chart freezing just before a peak, with the number "69000." A small winged Bitcoin coin floats upward.
There are sharp shadows, expressive lines, and a stark contrast between the warm orange and cool blue tones.
Recent tensions involving Israel and Iran, along with the threat to close the Strait of Hormuz, are pushing Bitcoin higher amid fears of inflation. An oil shock could push inflation to 5%, making Bitcoin an attractive safe haven. Some institutions and countries have started accumulating Bitcoin, supporting its rise even as profits are taken above $105,000.
The Middle East remains unstable. Markets are nervous. Israel recently launched surprise strikes against Iranian nuclear sites, killing several generals and scientists. Iran responded with Operation Rising Lion, hitting key locations like the Dimona nuclear plant, the Tel Aviv financial district, the Defense Ministry, military bases, Mossad headquarters, Ben Gurion Airport, the port of Haifa, and an oil platform.
Some see this as the start of a wider war. Statements From Israel suggest they won't stop easily. The U.S. quickly showed support, with President Biden visiting Netanyahu, who has fled to Greece. Notably, Netanyahu still faces a warrant from the International Criminal Court.
Meanwhile, former President Donald Trump issued warnings to Iran’s leader, Khamenei, saying they know his hiding spot. He hinted the U.S. isn't planning to target Khamenei yet but could do so later.
There’s growing fear that the U.S. might get involved militarily. Iran warned that any American intervention would start a full-scale war. Iran may also choose to shut the Strait of Hormuz, a key route for oil. Over 20% of the world’s oil flows through that strait — about 20 million barrels each day. This would greatly harm global markets and fuel inflation.
If the Strait closes, oil prices could jump to $120 or even $130 a barrel. That would push prices higher across many goods, especially food. Back in 2007, a rise in oil prices caused food costs to jump over 20%. This is because higher fuel and fertilizer costs affect food prices too.
A complete blockade of the Strait could boost global inflation to around 5%. But this is unlikely because most oil is headed for Asia, especially China, which is a close ally of Iran.
These tense times make it likely that many people will turn to Bitcoin for safety. Interest in Bitcoin should grow as negative stories fade away. Investors see it as a way to protect their money from inflation during uncertain times.