Bitcoin's Uptrend Faces Challenge from Pentagon Warning on Inflation

As bitcoin seemed poised to break through the $80,000 barrier, uncertainty resurfaced due to a warning from the Pentagon regarding inflation. The Pentagon informed U.S. lawmakers that clearing mines in the Strait of Hormuz could take at least six months and that gasoline and oil prices may remain high until after the U.S.-Iran conflict ends, according to the Washington Post. This could lead to persistent inflation, limiting the Federal Reserve's ability to cut interest rates, which negatively impacts risk assets like bitcoin. The recent surge in energy costs could also reduce investor appetite for speculative assets. These concerns are reflected in the market, with WTI crude rising to around $95 and government bond yields increasing across major economies. Despite this, U.S.-listed spot bitcoin ETFs are seeing sustained demand, with the fastest inflows in a month. However, some analysts urge caution, citing the lack of broad-based support in the spot market. The market capitalization of the largest dollar-pegged stablecoin, USDT, has reached a record high of $188.88 billion, while speculation in other tokens is intensifying. The ratio of bitcoin's price to gold has been rising, with the potential for a bullish crossover, indicating a shift in momentum in favor of bitcoin.