Bitcoin's Uptrend Faces Inflation Warning from Pentagon

As bitcoin appeared poised to break through the $80,000 threshold, uncertainty resurfaced due to a warning from the Pentagon about potential inflation. In a classified briefing, the Pentagon informed U.S. lawmakers that clearing mines in the Strait of Hormuz could take at least six months and would only begin after the U.S.-Iran conflict ends. This could lead to sustained high energy costs and sticky inflation, limiting the Federal Reserve's ability to cut interest rates. Bitcoin is particularly sensitive to interest rates and global liquidity, making it vulnerable to these developments. Rising essential costs could also deter investors from allocating capital to speculative assets like bitcoin. Markets are already reflecting these risks, with WTI crude climbing to around $95 and government bond yields rising. Some analysts caution that the recent price increase lacks broad-based support in the spot market and is driven by demand in the perpetual futures market, posing a risk of correction if traders start taking profits. Meanwhile, the market capitalization of the largest dollar-pegged stablecoin, USDT, has reached a record high, and speculation in non-serious tokens is intensifying. The ratio of bitcoin's price to gold has been steadily rising, with the potential for a bullish crossover that could indicate continued outperformance of bitcoin relative to gold.