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How the Strait of Hormuz Affects Bitcoin: BTC Price Faces the Iran Test
The Head of Research at CoinShares, James Butterfill, stated that global market volatility caused by the Iranian crisis represents a serious test of Bitcoin’s (BTC) role as a “safe haven.”
According to Butterfill, recent developments may force investors to reconsider the place of digital assets within the global financial system.
Over the weekend, geopolitical tensions escalated again, drawing attention to new steps taken by U.S. President Donald Trump that influenced markets. Even before the crisis, signals such as the UK’s withdrawal of part of its diplomatic personnel from the region indicated rising risk perception. However, the rapid developments once again brought the role of digital assets during crises to the forefront.
At the center of the crisis lies the Strait of Hormuz, which is crucial for global energy supply. Approximately 21% of daily global oil trade passes through this narrow strait. Therefore, any disruption in the region could have serious consequences not only locally but for the global economy.
Butterfill noted that the cancellation of maritime insurance in the region and increased tanker traffic indicate that the crisis is not merely rhetorical, and markets are beginning to price in real risks. Meanwhile, the resurgence of groups such as Hezbollah and the Houthis increases the likelihood of escalation.
As geopolitical risks increased, oil prices rose by approximately 13%, while gold prices fell by 1.8%. However, according to Butterfill, the most notable movement was seen in Bitcoin.
Bitcoin — the only major liquid asset that can be traded over the weekend — has historically acted as a “seatbelt” during similar crises, absorbing selling pressure during periods of risk aversion. This time, however, the picture was different.
Bitcoin’s price rose amid growing global uncertainty. Butterfill stated that this indicates capital flowing into Bitcoin rather than panic selling.
According to the analysis, Bitcoin’s resilience is also linked to the timing of the crisis. Large investors are estimated to have sold approximately $30 billion in assets over the past five months, significantly reducing supply pressure. During the same period, several technical indicators approached their minimum levels:
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The MVRV ratio declined to roughly one standard deviation below its fair value.
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The RSI indicator dropped to 16, entering oversold territory.
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The leverage ratio decreased from 33% in October 2025 to 25%, returning to its long-term average.
Butterfill stated that by the time of the geopolitical shock related to Iran, Bitcoin’s correction process had largely been completed.
The most important confirmation of market behavior came from fund flows. For five consecutive weeks, Bitcoin ETFs experienced outflows totaling $4.3 billion. However, last week the trend reversed, with approximately $1 billion flowing into ETFs.
Following weekend geopolitical tensions, an additional $500 million flowed into ETFs on Monday. Butterfill said these figures indicate that investors are not leaving the market but are instead turning to Bitcoin amid rising uncertainty.
Nevertheless, the macroeconomic environment remains complex. In the U.S., the Producer Price Index (PPI) showed a monthly increase of 0.5%, exceeding expectations. Core inflation came in at 0.8%.
Rising energy prices due to tensions with Iran suggest that commodity inflation may increase further. This has delayed rate-cut expectations, with the probability of a June rate cut in futures markets falling below 50%.
According to Butterfill, this creates a complicated short-term outlook for Bitcoin. High interest rates can reduce the appeal of non-yielding assets. However, as tensions between energy-driven inflation and trust in central banks persist, the appeal of scarce, non-sovereign assets like Bitcoin may increase.
Butterfill stated that a prolonged disruption in the Strait of Hormuz could have broader implications for the global financial system. Surging energy prices, supply chain disruptions, and pressure on the budgets of energy-importing countries could undermine confidence in global financial infrastructure.
In such conditions, some of Bitcoin’s core characteristics may come to the forefront.
Butterfill also recalled the freezing of approximately $300 billion in Russian central bank reserves in 2022, noting that political risks within the global financial system can alter investor behavior.
According to CoinShares, consolidation and limited downside risk for Bitcoin may persist in the short term. However, structural market changes deserve attention. The normalization of leverage ratios, reduced selling by large investors, stabilized valuation metrics, and $1.5 billion in ETF inflows amid rising geopolitical risks suggest that Bitcoin is increasingly behaving like a mature safe-haven asset.
Butterfill concluded: “The Iranian crisis did not confirm the thesis that Bitcoin is a safe-haven asset, but it was the most serious real-world test in this cycle.” According to the analyst, market behavior over the past 72 hours suggests that Bitcoin has passed this test — at least for now.
