Bitcoin's Uptrend Faces Inflation Warning from Pentagon

Bitcoin's apparent momentum towards surpassing $80,000 has been hindered by renewed macroeconomic uncertainty. A classified Pentagon briefing to US lawmakers revealed that clearing mines in the Strait of Hormuz, a crucial oil chokepoint, may take at least six months and will only commence after the US-Iran conflict is resolved. The briefing also cautioned that gasoline and oil prices might remain elevated until the midterm elections, as reported by the Washington Post. This could lead to persistent inflation, limiting the Federal Reserve's ability to cut interest rates and creating a challenging environment for risk assets like bitcoin, which is highly sensitive to interest rates and global liquidity conditions. Rising essential costs could also deter investors from allocating capital to speculative assets. These risks are already evident in markets, with WTI crude rising to around $95 from $79 and government bond yields increasing across major economies. According to Michael Kramer, founder and CEO of Mott Capital Management, 'Oil prices are rising alongside yields and widening volatility spreads, signaling tighter financial conditions and increasing market risks.' Despite sustained demand for US-listed spot bitcoin ETFs, some analysts urge caution, citing the rally's lack of broad-based support in the spot market. Julio Moreno, head of research at CryptoQuant, noted that 'The recent Bitcoin price increase is completely driven by demand in the perpetual futures market. Meanwhile, spot demand is still contracting.' The market capitalization of USDT, the largest dollar-pegged stablecoin, has reached a record high, while speculation in non-serious tokens is intensifying, with overcrowding in bullish bets. The ratio of bitcoin's price to gold has been steadily rising, with the 50-day average potentially moving above the 100-day average, indicating a bullish shift in momentum.