Wintermute warns war or fed pivot may hit Bitcoin

Bitcoin held modest gains during a broader market sell-off as escalating tensions in the Middle East pushed oil prices sharply higher and unsettled global financial markets.

Crypto market maker Wintermute said Brent crude surged about 26% during the conflict’s second week amid fears that disruptions in the Strait of Hormuz could affect roughly 20% of global oil supply.

“Whether bitcoin acts as a credible inflation hedge remains debated, but moments like this do more to build that narrative than any number of theoretical arguments,”

Wintermute said.

The firm said bitcoin traded near $70,000 to $71,500 even as equities, bonds and gold declined, suggesting the cryptocurrency remained relatively resilient during the market turbulence.

Derivatives data showed volatility remained elevated, with the Deribit bitcoin volatility index trading in the 60s while options markets maintained a put skew signalling demand for downside protection.

Wintermute said crypto market leverage sits around $60 billion, roughly half the peak levels seen in earlier cycles, which helped limit forced selling during the recent risk-off environment.

“Escalation or a hawkish pivot would screen bearish,”

Wintermute warned as traders monitor the upcoming Federal Open Market Committee meeting for signals on inflation and monetary policy.

At the time of reporting, Bitcoin price was $69,607.34.