Hormuz risk could pressure BTC liquidity if oil prices rise

Concerns are mounting over macroeconomic pressure on Bitcoin (BTC) as rising tensions in the Strait of Hormuz could lead to oil price instability over the next four weeks, BeInCrypto reported. Market observers believe a surge in oil prices could fuel inflation expectations, potentially delaying the Federal Reserve's interest rate cuts and weighing on risk assets. This could create a chain reaction: rising oil prices lead to renewed inflationary pressure, which dampens rate cut expectations, pushes up government bond yields, and ultimately reduces market liquidity. In such a scenario, Bitcoin's volatility could increase due to its nature as a high-beta liquidity asset. Analysts also note that given Bitcoin's recent high correlation with risk assets, a sharp rise in bond yields could accelerate the liquidation of leveraged positions.