Bitcoin's Uptrend Faces Challenge from Pentagon's Inflation Warning

As bitcoin appeared poised to break through the $80,000 barrier, uncertainty resurfaced due to a classified briefing by the Pentagon to U.S. lawmakers. The briefing indicated that clearing mines in the Strait of Hormuz, a crucial oil chokepoint, could take at least six months and would only commence after the U.S.-Iran conflict concludes. Additionally, it warned that gasoline and oil prices might remain elevated until the midterm elections, potentially keeping inflation high and limiting the Federal Reserve's ability to lower interest rates. This scenario poses a negative backdrop for risk assets like bitcoin, which is highly sensitive to interest rates and global liquidity. Rising costs for essential items could also deter investors from allocating capital to speculative assets. Markets are already reflecting these risks, with WTI crude rising to around $95 and government bond yields increasing across major economies. While U.S.-listed spot bitcoin ETFs continue to see sustained demand, some analysts are urging caution, citing the rally's lack of broad-based support in the spot market and warning of potential correction risks if traders start taking profits amidst contracting spot demand.