What will happen to Bitcoin if the United States gets involved in the Iran-Israel conflict?

The Israel-Iran war has entered its fifth day, but Bitcoin (BTC) remains priced above $100,000. However, the market direction is still uncertain in the context of the United States threatening to get involved in the war.

In addition, market experts warn that the escalation could put pressure on inflation and reduce risk appetite at the end of the year.

BTC: Cornered Between Inflation and War

In the market update on Wednesday, Singapore-based QCP Capital stated that BTC faces dual risks from war and inflation.

According to the trading company, a solution to the Israel-Iran conflict could keep BTC in a state of tension.

In particular, analysts from QCP warn that the conflict in the Strait of Hormuz, a critical global oil transportation corridor, could drive up oil prices and severely impact risk markets.

"If Tehran feels cornered, the disruption or complete blockade of the Strait of Hormuz will become a major risk. This could lead to a sharp increase in inflation at a time when global macro conditions are tense."

On June 17, the trading company warned about a potential global risk-off move if the United States gets involved in the conflict.

It is concerning that President Donald Trump's hawkish tone towards Iran's "unconditional surrender" has not resulted in a reconciliation agreement that would alleviate pressure on the market.

In fact, reports have indicated that a large amount of military equipment from the United States is moving eastward, with critical assets in the Middle East being put on high alert.

According to Polymarket's prediction page, the likelihood of the United States participating in the Israel-Iran war before July has surged to over 60%.

The rate was at 90% in August. In other words, the market has very high expectations for the United States to participate in the battle.

Source: PolymarketThis raises the question: which direction will BTC go and will it function as a hedge against risk or follow stocks?

The Next Path of Bitcoin

QCP Capital notes that the conflict could prompt the Fed to delay interest rate cuts in the second half of the year.

Regarding the Fed's decision on interest rates, the company added: "The market is currently pricing in two rate cuts in 2025, but we believe the Fed may only implement one cut."

According to analysts from QCP, the adjusted prospect of interest rate cuts may put pressure on BTC.

"Such adjustments can put pressure on risk assets, including BTC and the broader digital market.”

Meanwhile, BTC behaves more like a stock than a risk hedging asset. BTC is considered the best alternative hedge against war and inflation. However, at the current time, it has a positive correlation with stocks (risk-on) more than with gold (risk-off).

Source: The BlockAccording to the BTC Pearson Correlation indicator, the digital asset has a correlation of -0.07 with gold and +0.61 with the Nasdaq Composite. In summary, it behaves more like a technology stock than a hedge against risk.

Regarding the market position of BTC, there is a premium fee for call orders ( betting on short-term price increases with the Delta 25 deviation indicator for a 1-week period )8%( and 1 month )5%( trending upwards.

Simply put, options traders expect the price to recover in the short term despite having dropped from $108,000 to around $103,000.

! [])https://img-cdn.gateio.im/webp-social/moments-af5e6f2993869e3e7ae6f55552d10837.webp(Source: VeloNotably, the 6-month term )màu vàng( also improved but remained at a negative level, emphasizing the demand for put options )đặt falling giá( bets and hedging for the option expiration at the end of the year.

This reflects the potential risks at the end of the year if inflation spikes, as described by QCP Capital.

Overall, BTC remains resilient despite the ongoing Israel-Iran war and potential intervention from the United States. However, the impact of the war on inflation could affect the markets and BTC by the end of the year.

Vincent