US military strike on Iran shocks markets: How does the Hormuz Strait conflict affect crypto assets?

On July 7, 2026, the US Central Command announced a new large-scale military strike against targets inside Iran, hitting over 80 targets. On the same day, the US Treasury Department revoked the temporary sanctions exemption previously granted on Iranian oil sales. Consecutive explosions were later reported in Iran's southern coastal areas along the Strait of Hormuz. This series of events marks the fragile temporary ceasefire between the US and Iran on the verge of collapse.

What is special about the scale and targets of this US strike on Iran

The US Central Command stated in its statement that the strike used precision-guided weapons to hit Iran's air defense systems, command and control networks, coastal radar sites, anti-ship missile capabilities, and over 60 Islamic Revolutionary Guard Corps small boats in the Strait of Hormuz and surrounding waters. A US official made clear that this action was "not an equal response," but "punishment," and "would not end quickly."

Compared to the US-Israel airstrikes on Iran in February 2026, the scale of this strike has expanded significantly. The US side characterized this operation as a "direct response" to Iran's recent attacks on three merchant ships in the Strait of Hormuz. Notably, while launching the strike, the US military announced that the operation was complete. This "strike and done" model suggests this action is more focused on punishment and deterrence, rather than seeking a long-term military confrontation.

How do the Strait of Hormuz explosions and oil sanctions revocation link together?

The trigger for this event was the attack on merchant ships in the Strait of Hormuz. According to reports from the UK Maritime Trade Operations Office, three ships were attacked in the Strait of Hormuz within 24 hours, including a Qatari LNG carrier and a Saudi-flagged oil tanker. The Iranian Revolutionary Guard was accused of firing at least two missiles at merchant ships transiting the strait.

On the same day as the military strike, the US Treasury's Office of Foreign Assets Control announced the revocation of a previously issued 60-day authorization for Iranian oil sales. According to the newly issued license, no new transactions involving Iranian oil may occur from July 7. Previously approved transactions can be terminated by July 17. This policy reversal marks a major shift in US policy toward Iran — only a month earlier, the US Treasury had announced a temporary suspension of oil sanctions on Iran, allowing Iran to produce, sell, and transport crude oil and related products until August 21.

Iran's Foreign Ministry issued a statement early on July 8, condemning the US revocation of sanctions waivers as a serious violation of the US-Iran Islamabad Memorandum of Understanding signed on June 18.

Why does the strategic position of the Strait of Hormuz affect global energy supply?

The Strait of Hormuz is one of the world's most important oil transport routes. Data show that the strait handles approximately 32% of global seaborne crude oil transportation, with a normal daily volume exceeding 14 million barrels. Since the outbreak of the Iran war in February 2026, the strait has been in a state of shipping disruption for months. As of early July, the daily oil flow through the Strait of Hormuz had dropped to about 3.8 million barrels, far below the pre-war daily average of 20 to 21 million barrels.

Although OPEC+ announced a production target increase of 188k barrels per day starting in July, the added crude cannot be shipped out because major producers such as Saudi Arabia, Iraq, and Kuwait rely heavily on the Strait of Hormuz for their crude exports. This disparity between "paper production increases" and actual supply exerts significant tightening pressure on the global energy market.

How did global asset prices react to this geopolitical event?

During Asian trading hours on July 8, global capital markets experienced sharp volatility. International oil prices opened significantly higher, with WTI crude rising over 6% at one point, breaking through $72 per barrel. US crude rose 2.89% to $72.47 per barrel.

Gold and Bitcoin did not rise sharply as traditional safe-haven logic would suggest. Spot gold fell below $4,100 per ounce, trading at $4,114.27 per ounce; Bitcoin dropped about 1.5% to $63,439.9 per coin. In the past 24 hours, over 100k people were liquidated across the market.

This price reaction pattern is noteworthy: geopolitical risk pushes up oil prices and the US dollar, and a stronger dollar typically pressures assets denominated in dollars. In this event, cryptocurrencies showed a similar stress characteristic to risk assets, rather than a pure safe-haven attribute.

Through which channels does geopolitical risk transmit to the crypto market?

Geopolitical risk transmits to the crypto market primarily through three channels:

First, the risk appetite channel. An escalation of geopolitical conflict directly dampens global market risk appetite. Funds shift from risk assets to safe assets, and cryptocurrencies, as high-volatility assets, bear the brunt. During the US-Israel airstrikes on Iran in February 2026, Bitcoin fell in tandem with risk assets; in this conflict, Bitcoin also faced pressure.

Second, the dollar liquidity channel. Conflict in the Middle East pushes up oil prices, which in turn raises inflation expectations and rate hike expectations. A higher interest rate environment makes it harder for investors to give up returns from safe bonds to invest in high-risk assets like cryptocurrencies. The US dollar index strengthens during geopolitical conflicts, further pressuring crypto asset prices denominated in dollars.

Third, the structural divergence channel. Notably, Bitcoin demonstrated a certain degree of resilience in this event. Against the backdrop of a broad decline in US tech stocks, chip stocks, and a 4.65% drop in the Philadelphia Semiconductor Index, Bitcoin's overall decline was relatively limited. There was no panic selling, and no large-scale cascading liquidations on the chain or in the derivatives market. This suggests that some funds are beginning to view Bitcoin as an asset with both anti-inflation and safe-haven properties, and its correlation with traditional risk assets is gradually weakening. However, this trend requires more time for validation.

What does the breakdown of the US-Iran interim agreement mean for the situation going forward?

The temporary ceasefire between the US and Iran was originally a key mechanism for easing tensions in the Middle East. The 60-day oil sales license issued by the US Treasury in June was the economic pillar of that agreement. By revoking the sanctions waiver and launching a military strike, the US has placed that agreement under severe strain.

Iran has clearly indicated it will take retaliatory action. The Iranian Armed Forces' Khatam al-Anbia Central Headquarters issued a statement reiterating that under no circumstances will it allow US interference in the management of the Strait of Hormuz. This means shipping security in the Strait of Hormuz is unlikely to be guaranteed in the short term.

In the medium term, the most critical variable is when the Strait of Hormuz will resume navigation. As OPEC+ has continued to raise production targets during the blockade, a large volume of approved but undelivered supply is "queuing up." Once the strait reopens, the backlog of crude oil could flood the market in a short period, causing market sentiment to quickly shift from fear of shortage to fear of oversupply. This asymmetric risk means both the energy market and the crypto market will face high uncertainty for some time to come.

Summary

On July 7, 2026, the large-scale US strike on Iran, the explosions in the Strait of Hormuz, and the US revocation of Iranian oil sanctions waivers together constitute a geopolitical shock with structural implications. This event not only directly pushed up energy prices but also transmitted effects to the crypto market through three channels: risk appetite, dollar liquidity, and asset pricing logic. Bitcoin showed some resilience in this event, but its "digital gold" safe-haven attribute has not yet been fully validated. Before the US-Iran situation becomes clearer, the market will likely remain volatile. Investors should closely monitor the navigation status of the Strait of Hormuz, subsequent progress in US-Iran negotiations, and changes in global inflation expectations — these three threads will jointly determine the medium-term pricing direction of crypto assets under the risk of Middle East geopolitical tensions.

FAQ

Q: What are the scale and targets of this US strike on Iran?

The US hit over 80 targets, including Iran's air defense systems, command and control networks, coastal radar sites, anti-ship missile capabilities, and over 60 Islamic Revolutionary Guard Corps small boats. The US called it a "punishment" operation, not an equal response.

Q: What exactly is the US revocation of Iranian oil sanctions waivers?

The US Treasury revoked a previously issued 60-day general license for Iranian oil sales. No new Iranian oil transactions may occur from July 7, and previously approved transactions can be terminated by July 17.

Q: What impact did this event have on crypto asset prices?

As of July 8, 2026, Bitcoin fell about 1.5% to $63,439.9; Ethereum, Ripple, and other major cryptocurrencies also fell. In the past 24 hours, over 100k people were liquidated across the market.

Q: How does geopolitical risk affect cryptocurrency prices?

It transmits through three main channels: declining risk appetite weighs on high-volatility assets, a stronger dollar imposes valuation pressure on crypto assets, and rising inflation expectations may push up rate hike expectations.

Q: How important is the Strait of Hormuz to the global energy market?

The strait handles approximately 32% of global seaborne crude oil transportation, with a normal daily volume exceeding 14 million barrels. Since the outbreak of the war in February 2026, daily oil flow has dropped to about 3.8 million barrels.