Over the weekend, Bitcoin unexpectedly dropped below the $100,000 mark, alarming investors worldwide. This downturn, the steepest since May, is attributed to rising geopolitical tensions, particularly regarding Iran's potential blockade of the Hormuz Strait.
Impact of Hormuz Strait Closure
The Hormuz Strait connects the Persian Gulf to the Gulf of Oman and the Arabian Sea, representing a strategic channel that handles about 20% of global oil shipments. Speculation over its potential closure by Iran has significantly heightened forecasts for a dramatic uptick in oil prices.
Indirect Impact on Other Cryptocurrencies
Alongside Bitcoin's decline, major cryptocurrencies such as XRP, Solana, and Ethereum have also faced significant losses. XRP dropped to its lowest since April 10, while Ethereum returned to early May levels.
Potential Economic Consequences
JPMorgan analysts speculate that a spike in oil prices could drive U.S. inflation to unprecedented heights this year. If oil reaches $120-$130 per barrel, inflation might hit 5%, necessitating potential Federal Reserve interventions.
The current geopolitical landscape highlights the significant vulnerability of the cryptocurrency market to global uncertainty. Potential disturbances in the energy market could have far-reaching implications for supply chains and global economic stability.
