Bitcoin's Uptrend Faces Inflation Warning from Pentagon

As bitcoin appeared poised to break through the $80,000 threshold, uncertainty has reemerged, tempering its momentum. A classified briefing by the Pentagon to U.S. lawmakers highlighted that clearing mines in the Strait of Hormuz could take at least six months, potentially keeping oil and gasoline prices high through the midterm elections. This warning of sustained inflation limits the Federal Reserve's ability to cut interest rates, posing a challenge for risk assets like bitcoin, which is sensitive to interest rates and global liquidity. Rising costs for essentials may also deter investors from speculative assets. Markets are already reflecting these risks, with WTI crude prices surging to around $95 and government bond yields increasing across major economies. Despite sustained demand for U.S.-listed spot bitcoin ETFs, analysts caution that the rally lacks broad support in the spot market, warning of potential correction risks if traders take profits while spot demand contracts. The market capitalization of the largest dollar-pegged stablecoin, USDT, has reached a record high, while speculation in certain tokens is intense, prompting warnings of overcrowding in bullish bets.