Bitcoin Takes Hit as Iran Rising Tensions Send Oil Above $100

Bitcoin and the broader cryptocurrency market are facing renewed selling pressure as the escalating US-Iran war rattles global energy markets and pushes crude oil above $100 a barrel.

The Strait of Hormuz has emerged as a major source of concern for global oil supplies, with disruptions to shipping adding another layer of uncertainty to an already volatile market. The resulting jump in energy prices is also complicating the outlook for inflation and US monetary policy, a combination that could weigh further on risk-sensitive assets such as Bitcoin.

The market moves come ahead of the Federal Reserve’s September 15-16 meeting, with investors reassessing the likelihood of another interest-rate increase following stronger-than-expected US inflation data and a sharp rise in energy prices linked to the conflict.

Strait of Hormuz Becomes Flashpoint for Global Markets

Concerns over energy supplies intensified after shipping activity through the Strait of Hormuz fell significantly from its recent average.

The waterway is a critical artery for global energy markets, with roughly 20% of the world’s oil supply passing through it before the war. Attacks on Saudi oil infrastructure have added to concerns over alternative export routes, while tensions have also spread toward the Bab el-Mandeb Strait.

Brent crude climbed more than 3% on Monday to around $107.82 a barrel, while West Texas Intermediate rose to approximately $103.22, reflecting growing concerns over prolonged supply disruptions.

Saudi Arabia has also temporarily halted the East-West oil pipeline after it was damaged in a drone attack. The route provides an alternative to shipping crude through Hormuz, meaning the disruption could further constrain export capacity.

According to Reuters, the pipeline shutdown could affect as much as 4% of global oil supplies, while available inventories along the route remain limited.

At the same time, vessel traffic through Hormuz has dropped well below the average recorded over the previous 10 days, highlighting the continuing security risks surrounding one of the world's most important energy corridors.

Advances by Iran-backed Houthi forces around Bab el-Mandeb have added another layer of risk, raising concerns that disruptions could extend to additional shipping routes.

Iran Turns to Crypto Under US Sanctions

The conflict is also highlighting a different role for digital assets inside Iran.

Beyond their performance as investment assets, cryptocurrencies have increasingly been used within Iran to facilitate cross-border transactions amid US sanctions and restrictions on access to the international financial system.

The Financial Times reported that Iran has increasingly turned to assets including Tether and Bitcoin to support trade and transfers, while the Central Bank of Iran has eased some restrictions on the conversion of export proceeds.

Data cited by the newspaper indicated that roughly $10 billion worth of cryptocurrency moved through Iran during 2025.

Bitcoin mining also provides another source of digital-asset activity and revenue. Iran accounts for an estimated 4.5% of global Bitcoin production, according to the report.

That creates an important distinction in how crypto is functioning amid the conflict. For global investors, Bitcoin remains a highly liquid risk asset exposed to changes in market liquidity and monetary policy. Within Iran, digital assets can serve a more practical function by facilitating transfers and trade where conventional financial channels are constrained.

Bitcoin Falls as Crypto Market Loses Ground

The broader digital-asset market has also come under pressure.

Total cryptocurrency market capitalization fell 4.32% over 24 hours to roughly $2.62 trillion, while Bitcoin traded near $76,718, following a 4.4% weekly decline.

Ethereum also moved lower, falling 1.79% to approximately $2,478.43.

The sell-off reflects two simultaneous pressures facing digital assets.

Rising geopolitical risk is increasing volatility across global markets, while higher oil prices are raising concerns over a renewed inflationary shock. If elevated energy costs feed into broader inflation, expectations for easier monetary policy could weaken further.

That combination tends to be unfavorable for assets such as Bitcoin, particularly when investors become more selective about exposure to higher-risk investments.

Oil Surge Complicates the Fed’s Next Move

The rise in energy prices has become particularly important for US monetary policy.

US inflation has come in stronger than expected, while the war-driven increase in oil prices introduces another potential source of price pressure. Markets have consequently been reassessing the Federal Reserve's next move.

Market data cited by Reuters put the probability of a September rate hike at around 87%.

Higher interest rates can weigh on cryptocurrencies by increasing the relative appeal of traditional yield-bearing assets and tightening the pool of liquidity available for riskier investments.

The Federal Reserve is scheduled to meet on September 15 and 16, placing its policy decision among the most important near-term catalysts for Bitcoin and the broader digital-asset market.

Crypto and Precious Metals Face Selling Pressure

The selling has not been limited to cryptocurrencies.

Gold slipped 0.22% to $4,340.58, while silver declined 0.25% to $64.11 and copper dropped 1.08% to $6.40.

The simultaneous weakness across crypto and several traditionally defensive commodities suggests that investors are navigating a broader risk-off environment rather than simply rotating between individual asset classes.

For Bitcoin, the move is particularly significant because the asset has long been debated as both a risk asset and a potential hedge against macroeconomic and geopolitical instability.

Hormuz Crisis Puts Bitcoin’s Safe-Haven Narrative to the Test

The latest developments expose a central tension in Bitcoin's investment thesis.

In theory, a geopolitical crisis that threatens energy supplies and financial stability could strengthen demand for an asset operating independently of traditional financial infrastructure.

The market response has so far been different.

Bitcoin's decline shows that geopolitical turmoil does not automatically translate into demand for crypto as a safe haven. If a conflict pushes oil prices higher, fuels inflation and increases the likelihood of tighter monetary policy, Bitcoin can instead come under additional pressure alongside other risk assets.

Iran's growing use of cryptocurrencies illustrates the other side of the equation. Digital assets can provide an alternative channel for transfers and trade when access to conventional financial infrastructure is restricted.

The conflict around Hormuz is therefore testing two very different roles for crypto at the same time: Bitcoin's ability to function as an investment hedge during a global shock, and digital assets' ability to operate as alternative financial infrastructure in economies facing financial isolation.

The outcome could depend heavily on whether the conflict remains contained or develops into a prolonged energy and inflation shock — and, ultimately, how the Federal Reserve responds.