On May 4, 2026, US President Trump made a high-profile announcement to launch a “Freedom Plan,” intending to guide merchant ships trapped in the Strait of Hormuz to pass through. The plan called for deploying missile destroyers, more than 100 sorties of aircraft, and about 15,000 active-duty servicemembers. However, less than 48 hours after the plan was implemented, Trump announced a suspension, citing “major progress in the comprehensive US-Iran agreement.” But Iran’s stance was very different: Iran’s top leader’s foreign affairs adviser clearly stated that the strait was still closed, and that all transiting vessels must obtain Iran’s permission to pass through. The following May 8, the US also confirmed that a potentially restored upgraded version of the “Freedom Plan” could be in the works, and that US forces attacked two Iranian oil tankers that same day. From a high-profile launch to an emergency shutdown to a threat of a restart, this game over the world’s most critical energy passage is ongoing—continuously reshaping the pricing logic of global assets.
A Lockdown Lasting for Two Months: The Deep Consequences of the Strait of Hormuz Being Closed
Since the late February outbreak of war between the US and Iran, the Strait of Hormuz has remained closed for more than two months. This strait carries nearly 20% of the world’s oil shipments. Before the war, the average daily number of vessels transiting was about 130 or more, making it a core passage for crude oil exports from the Persian Gulf region. The blockade has disrupted global crude oil supply channels—Iran’s oil exports of about 2 million barrels per day have become near zero. Shipping companies are in an awkward position: the transit requirements proposed by the US and Iran conflict with each other, meaning “shipping firms simply don’t know how to meet both sides’ conditions at the same time.” More deeply, Iran is advancing the “institutionalization” of its control over the strait. It has even announced a transit fee of about $1 per barrel of oil for ships passing through, requiring payment in RMB, USD stablecoins, or Bitcoin. Some analysts have pointed out that this would be “the first time a nation has embedded virtual assets into international trade infrastructure.”
Oil Price Leading Indicators: Reassessing Supply and Demand Fundamentals After Brent Doubled
Since the start of the year, Brent crude oil prices have risen to more than double—climbing from pre-war lows to above $100 per barrel in early May 2026. On May 6, as expectations for US-Iran talks heated up, international oil prices saw a sharp drop intraday. WTI crude and Brent briefly fell by more than 10%: WTI fell to $91.79 per barrel, and Brent closed at $101.27 per barrel. But only a few days later, as the military conflict escalated again, oil prices rebounded immediately, with Brent trading around $102 per barrel. The pressure on the supply-demand fundamentals is also impossible to ignore: global total visible oil inventories have decreased by 255 million barrels compared with before the conflict began; consumption accounts for nearly 50% of the 2025 inventories; and waterborne inventories are approaching their lows. Citigroup said bluntly, “Until both sides clearly reach an agreement, oil prices will continue to swing violently.” Persistently high oil prices are feeding into broader economic sectors.
Oil Price → Inflation → Risk Pricing: A Complete Three-Stage Transmission Chain
The way geopolitical conflict affects crypto assets is not linear; instead, it indirectly transmits through a three-stage chain: “oil prices → inflation expectations → risk asset pricing.” Goldman Sachs has raised its forecast for year-end core PCE inflation to 2.6%, lifted overall PCE from 3.1% to 3.4%, and this inflation boost is not driven by demand overheating, but rather by a combined result of supply-side shocks layered with tariff effects. Higher energy costs mean persistent inflation pressure—this not only delays the market’s expectations for the Federal Reserve to cut rates, but also implies harsher discount-rate conditions for risk assets. After the US-Iran airstrike incident in February 2026, Bitcoin surged from $63,000 to $68,000 within hours; however, during that period it also briefly plunged, triggering an $8 billion market-cap fluctuation—fully demonstrating that in geopolitical panic, liquidity is fragile and the risk of “run-up rebounds” coexisting with that fragility.
Crypto “Roller Coaster”: From Panic Selling to Front-Running Rebound
During this conflict, Bitcoin has shown a switching profile between “tail risk assets” and “crisis-useful assets.” Since the escalation of the conflict, Bitcoin has risen cumulatively by about 20%. In February 2026, Bitcoin once fell to around $60,000; then, in early May, it rebounded strongly and regained the $80,000 threshold. During that period, after a temporary ceasefire agreement took effect in April, Bitcoin briefly broke above $71,000; within 48 hours, $427 million worth of short positions were forced-liquidated. However, on May 8, when news of military clashes in the Strait of Hormuz emerged, Bitcoin briefly fell below $79,000; it then rebounded again. As of May 9, 2026, Bitcoin has been broadly ranging around $80,000. This repeated “sharp drop—rebound” structure is a typical manifestation of the alternating effects of “front-running rationality” and “liquidity panic.”
Bitcoin’s True Role: “Safe-Haven Asset” or “War Hedging”?
Academic research offers a cautious assessment of asset behavior in geopolitical conflicts. A recent event study published in Economics Letters shows that, around the escalation of the Iran conflict in February 2026, gold provides only “weak safe-haven characteristics,” Bitcoin does not provide “robust risk protection,” while oil shows the clearest short-term hedging effect—“because its returns are directly exposed to supply risks related to war.” Another study notes that “Bitcoin is not a safe-haven asset, but it can indeed play a role when the financial system malfunctions”—it has functional value in extreme situations such as the closure of borders and bank failures. A more detailed analysis suggests that in geopolitical panic, a surge in the panic index will first trigger indiscriminate selling across assets to obtain US dollar liquidity; but after a brief liquidity squeeze, Bitcoin—uncontrolled by any specific sovereign state and possessing properties of resistance to censorship and portability—often captures some of the capital that escapes from high-volatility fiat currencies. Therefore, Bitcoin should be understood more as a “back-and-forth sprinter of the conflict cycle”—first falling and then rising in high-intensity events, with volatility higher than almost all traditional assets.
The Future of the Strait of Hormuz: Reconstructing Crypto Assets Under Three Scenarios
There are three possible directions for the future situation:
- First, if the US and Iran reach a memorandum of understanding, a roughly 30-day negotiation window would open. The strait would be opened in stages. Oil prices would be pressured downward as expectations for supply recovery cool inflation pressure, risk appetite would pick back up. But because the strait’s “toll system” and the precedent of crypto settlement have already been written into reality, the center of the geopolitical premium may not fully unwind.
- Second, if negotiations repeatedly break down and the US and Iran fall into a “low-intensity friction normalized” state, the strait would continue to restrict passage, oil prices would consolidate at high levels, inflation expectations would remain rigid, and risk assets would continue to face pressure. But the two-way volatility range of Bitcoin in rebounds during staged crises may widen.
- Third, if confrontation suddenly escalates to a level of full-scale military conflict—in such tail-risk scenarios, systematic offshore US dollar demand would lead to indiscriminate selling of all risk assets, making Bitcoin’s first-round shock extremely intense. But afterward, if disruption in traditional cross-border payments appears or sovereign credit risk spreads, Bitcoin’s “censorship-resistant” attribute would be activated.
It is important to emphasize that in May 2026, Iran’s practice of requiring crypto-currency payments for strait transit fees has caused Bitcoin to be embedded into the international energy trade settlement system in an unprecedented way. This structural change may have far-reaching implications for the geopolitical pricing of crypto assets in the future.
Beyond Data and Logic: Position Risk Coordinates in Your Hands
Against the backdrop of the continued game over the Strait of Hormuz, the core issue in crypto position management is: is the holder standing on the side of risk exposure to inflation transmission, or on the side of volatility games in crisis rebounds? The former corresponds to the macro pressure of ongoing tightening, while the latter corresponds to pulse opportunities from crisis buying. Signals from the options market are very clear—implied volatility in derivatives remains at high levels, indicating the market expects large two-way volatility to persist for the next several weeks to several months. Historical data shows that when market pricing is centered on a “limited conflict,” holding positions based solely on the “digital gold” narrative has significant limitations; volatility in the geopolitical premium will be the core variable for crypto asset prices in the coming months. For position holders, the core is not to judge the final direction of geopolitical events, but to confirm the tolerance range of one’s own position to changes in oil price sensitivity, inflation expectations, and US dollar liquidity changes. These three are no longer peripheral variables in the crypto market; they are already core factors deeply embedded in pricing models.
Summary
The US-Iran game over the Strait of Hormuz has evolved from short-term military standoffs into long-term structural tension characterized by “permanent normalization of stalemate, low-intensity conflict, and fragmented negotiations.” In this game, Bitcoin is neither a typical safe-haven asset nor a pure risk asset; instead, it swings sharply along a back-and-forth path of “panic selling—front-running rebounds.” Persistently high oil prices transmit into crypto market pricing through inflation expectations, and Iran’s practice of charging transit fees in crypto has quietly embedded Bitcoin into the international energy trade settlement system. No matter which direction the strait evolves next, the geopolitical premium will be an unavoidable pricing constant for the crypto market.
FAQ
Q: Will the closure of the Strait of Hormuz directly affect Bitcoin’s price?
Not directly. The transmission path is: closure of the strait → crude oil supply constrained → oil price rises → inflation expectations heat up → tightening of expectations for Federal Reserve policy → re-pricing of risk assets. Bitcoin sits at the end of this chain and is indirectly affected by macro sentiment and liquidity.
Q: Why does Bitcoin drop first and then rise when geopolitical conflicts happen?
In the early stage of panic, investors generally sell risk assets to obtain US dollar liquidity. Bitcoin, as a high-volatility risk asset, gets reallocated out of its positions and cleared. Then, some capital that fled sovereign fiat currencies may flow into Bitcoin not controlled by any sovereign state. This “front-running rebound” has been validated multiple times across different conflict events.
Q: Can the investment logic for crypto assets under the current situation be simply summarized?
Yes—can be summarized as a “two-way high-volatility” positioning. The bullish logic: oil prices raise inflation pressure, fiat purchasing power is diluted, and some funds seek non-sovereign assets. The bearish logic: high inflation delays expectations for rate cuts, and tighter overall liquidity suppresses the valuation core of all risk assets. Both sides will continue to tug-of-war for the coming months.
Q: What is the significance of Iran charging crypto transit fees?
This initiative makes “a state entity embedding virtual assets into international trade infrastructure” a reality. Although Chainalysis believes actual payments may mainly use stablecoins such as USDT, this precedent opens up strategic imagination for crypto assets in sovereign-to-sovereign settlement.
