#StraitOfHormuz

Strait of Hormuz Crisis: Impact on Crypto
The biggest macro risk for the market in May 2026: The Strait of Hormuz. 20-30% of the world’s oil passes through this strait, just 21 nautical miles wide. With the US-Iran conflict that started on February 28, the strait is effectively closed and all risk assets, including crypto, are directly affected.

1. Oil Shock → Risk-Off
• Brent: Climbed to $126 and hit a 4-year high, posting a 9-day green streak. It was $65 before the war. • BTC: Dropped to $75,633, $50K below the $126K ATH from October 2025. It was stuck in the $74K-$78K range throughout April. • Every “Hormuz” headline brings a sharper sell-off in BTC. As long as oil stays above $100, BTC struggles to break $80K.
2. Why Does the Mechanism Work Like This?
Oil ↑ → Inflation expectations ↑ → The Fed keeps rates steady at 3.5%-3.75% → Liquidity stays tight → Exit from risk assets.

Also, high energy costs hit BTC mining profitability, increasing network security costs.

3. Catalyst Watch
• Positive: On May 1, Iran submitted a new peace proposal via Pakistan. BTC jumped to $78,800 on the news. Brent fell 4% to $106. • Negative: Trump said “Iran is collapsing, we want them to open Hormuz” but the blockade hasn’t lifted. Axios: The US prepared a “short and strong” attack plan against Iran. • Critical Level: Analysts say Brent needs to fall below $100 for BTC to sustainably move above $80K. If the blockade lifts, an $85K target is being discussed.
4. On-Chain + Derivatives
• As BTC dropped to $75K, $427M in shorts were liquidated. • Spot BTC ETFs saw $1.97B in inflows in April, a 2026 record. Institutional demand is structural support. • Iran claim: It will collect a $1/barrel fee in crypto from ships passing through the strait. Only a few ships pass per day, transit is slow.
My Takeaway: Hormuz is currently acting like a “petroleum beta” for BTC. Peace news → oil ↓ → BTC ↑. If war escalates → oil ↑ → $68K-$75K tested in BTC.

That’s why I split my trading plan for May in two:
• Long scenario: If the strait opens, $85K-$90K on a 4H close above $80K. • Risk scenario: If news of a new attack comes, stop below $75K, $68K support.
Until the geopolitical risk premium is gone, reduce leverage and follow the news flow live.

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Note: This post is not investment advice. Always do your own research (DYOR).