Bitcoin fell about 3% on Wednesday to near $83,200, as a jump in oil prices spread through markets.
It opened the day around $85,500 and touched a low near $82,800. Brent crude climbed back above $101 a barrel.
The oil shock
The move in oil follows a run of attacks on shipping in and around the Strait of Hormuz. The UK Maritime Trade Operations agency has logged at least one attack a day in the strait or the Gulf of Aden since 2 October, according to Al Jazeera. On Monday, Iran’s Revolutionary Guard ordered a tanker entering the strait to turn back or risk being attacked.
Higher oil feeds directly into inflation fears, and inflation fears push up bond yields. The 30-year US Treasury yield reached 5.70%, its highest since 2002, with the 10-year near 5.34%.
Where it hit
Crypto took the brunt. About $969 million of positions were liquidated over 24 hours, according to CoinGlass, and $644 million of that came from long positions betting on prices rising.
Ether fell harder than Bitcoin, down about 5% to around $2,564, with XRP down a similar amount.
Traditional markets were softer but calmer. The S&P 500 slipped about 0.6% from its record high and the Nasdaq about 0.7%. Gold, normally a refuge in a geopolitical scare, fell 1.5% to around $4,123.
The bigger picture
The last time Middle East tensions lifted oil this sharply, in June, Brent reached $96, and Bitcoin hit a low near $59,500 later that month. It has since recovered about 40% from that low.
For now the pressure is coming from outside crypto, through oil and interest rates. That means the next move depends more on shipping news from the Gulf than on anything happening on-chain.
