Bitcoin Below 62K - Are the Iran Deal and Oil Price Falls Actually Good for Crypto

[Rapid Crossing]

Oil dropping below 80 dollars on the US-Iran peace deal is a significant macro event and the question for crypto markets is whether falling energy prices change the calculus. The argument that crypto has been under pressure partly because of inflation driven by energy costs has some logic to it. If oil falls sharply and stays down, inflation expectations fall, the Fed becomes more likely to cut rates, and risk assets including crypto become more attractive.

Bitcoin has been sitting around 61,000 to 62,000 dollars through the past week, down roughly 30 percent year-to-date from October's peak above 126,000. The Strait of Hormuz reopening removes one of the macro headwinds that has been suppressing risk appetite. Whether it is enough to change the trend is a different question. The ETF outflows that have been driving recent weakness are related to portfolio allocation decisions that may not reverse immediately just because one risk factor improves.

Do you think the Iran deal and the oil price fall changes the Bitcoin outlook materially, or are there too many other headwinds for one macro factor to shift the trend?

[Glenn]

The oil price fall is bullish for Bitcoin in theory and I think the timeline matters. If oil stays down for two quarters and feeds through into lower inflation readings that is a Fed pivot story and risk assets including crypto benefit meaningfully