A safe asset?
Action is unstable, but Bitcoin BTC$70,436.70 For now, it has remained at just above $70,000, even as other risk assets have sold off across the board.
Concerns about the Strait of Hormuz, a key shipping route for tankers, have caused oil prices to rise more than 10% and approach $100 a barrel, contributing to the drop in stocks.
“For me, I’m more concerned about deterring Iran than I am about oil prices,” President Trump said Thursday. Meanwhile, Mojtaba Khamenei, in his first public statement since being appointed Iran’s supreme leader, said the Strait of Hormuz should remain closed.
“It is becoming clear to everyone that the Strait is far from under control and potentially impossible to control without significant concessions to Iran, grounded action, or significant military risk,” said Quinn Thompson, founder of Wrecker Capital. “Things get choppy from here, and volatility increases as the Bucks hit a wall.”
Near noon on the East Coast, the Nasdaq was down 1.6%, near its intraday low, and the S&P 500 was down 1.2%.
What remains a major concern, although thanks to Iran it has disappeared from the front page, is the continued concern about the collapse of private confidence. Morgan Stanley (MS) is the latest in a wave of financial giants to cap redemptions, with its $8 billion North Haven Private Income Fund. Morgan Stanley stock fell 4% on Thursday, leading the decline in the financial sector. JPMorgan, Citigroup and Wells Fargo fell nearly 3%.
In private equity, KKR, Apollo Global and Ares Management all fell 3% to 4%.
Meanwhile, gold fell 0.6% and the 10-year Treasury yield rose 3 basis points to 4.23%.
oil moves the market
According to James Butterfill, head of research at CoinShares, oil is the main driver of crypto prices. “The key variable driving global asset prices is no longer the labor market; it is oil and the geopolitical crisis that underpins it,” he said in a note. He argued that the market’s response to the government’s weaker-than-expected U.S. jobs report, which would normally have priced in an acceleration of interest rate cuts by the Federal Reserve, was muted as investors focused instead on rising energy costs due to conflicts in the Middle East.
Despite Thursday’s pullback, Bitcoin has remained relatively resilient despite rising geopolitical tensions and broader market uncertainty, holding near $70,000 even as investors reassess global risks.
According to Dom Hertz, co-founder of Layer 2 Blockchain BOB, the reason may be that large investors are increasingly looking for more than simple exposure to the Bitcoin price. “Institutions want more than exposure to Bitcoin and are increasingly seeking infrastructure designed to unlock the financial utility of Bitcoin,” he said in the note, noting growing interest in Bitcoin-based financial applications that allow users to spend, save and earn using the network.