Bitcoin's Upward Trend Faces Inflation Warning from Pentagon

As bitcoin appeared poised to break through the $80,000 threshold, macroeconomic uncertainty reemerged as a significant challenge. A classified briefing by the Pentagon to U.S. lawmakers revealed that clearing mines in the Strait of Hormuz could take at least six months, with the process beginning only after the U.S.-Iran conflict ends. This warning, combined with potential elevated gasoline and oil prices through the midterm elections, may lead to persistent inflation. The Federal Reserve's ability to cut interest rates could be limited, creating a negative environment for risk assets like bitcoin, which is highly sensitive to interest rates and global liquidity conditions. Rising costs of essentials such as fuel and food could also reduce investors' willingness to invest in speculative assets. Markets are already reflecting these risks, with WTI crude prices increasing to around $95 from $79 and government bond yields rising across major economies. The U.S. 10-year yield has increased by eight basis points to 4.32%, and the U.K. counterpart has risen by 18 basis points to 4.96%. Despite sustained demand for U.S.-listed spot bitcoin ETFs, some analysts are urging caution, citing the lack of broad-based support in the spot market and warning of potential correction risks if traders start taking profits while spot demand continues to contract. The market capitalization of the largest dollar-pegged stablecoin, USDT, has reached a record high, while speculation in other tokens is reaching a fever pitch. The ratio between bitcoin's price and gold has been steadily rising, with the 50-day average potentially moving above the 100-day average, suggesting a bullish shift in momentum.