The US military struck Iranian positions near the Strait of Hormuz on Monday. Bitcoin held above $78,000 despite a 0.7% decline over 24 hours, while oil prices climbed and Wall Street indices fell in response to the escalating geopolitical tensions.
Oil and markets react
WTI crude oil rose 2% to $85.10 per barrel on August 31, according to CoinDesk, while Brent crude gained 1.9% to $92.39 per barrel. About 20 million barrels of oil transit the Strait of Hormuz daily, representing 20% of global oil consumption. The strikes rattled equity markets as traders weighed the risk of further escalation.
Bitcoin’s resilience came as markets absorbed the broader fallout. On August 31, CoinDesk quoted Bitcoin at $78,623. August had been Bitcoin’s strongest August since 2017, with a gain of more than 24% for the month.
Fed policy and crypto headwinds
Kevin Warsh, who chairs the Federal Reserve, delivered distinctly hawkish remarks at Jackson Hole, adding to uncertainty around monetary policy. Meanwhile Donald Trump has publicly pushed the Federal Reserve to lower interest rates, setting up a public standoff with Kevin Warsh, his own pick to lead the institution after Jerome Powell’s departure. Markets priced a 58% probability of a US interest rate increase in September as of August 31.
Bitcoin miners face cost pressures from recent halving and rising electricity expenses tied to oil prices. If oil reaches $95 per barrel in an escalation scenario, mining electricity costs could exceed sustainable levels for some operators. At $90 per barrel and above, those cost pressures intensify.
