Bitcoin (BTC) initially dropped before paring all losses, leaving market participants wondering what higher oil prices would mean for BTC price going forward.
Key takeaways:
Escalating Middle East conflict pushes oil to $79, putting Bitcoin at risk of a drop to $60,000 due to inflation shocks and delayed Fed rate cuts.
BTC drops against oil price spikes in the short term, but outperforms in the medium to long term.
Bitcoin faces short-term risks as oil prices surge
Data from TradingView showed oil rose to a 15-month high of $79.84 during the early Asian trading hours on Monday, amid news of Iranian drones hitting Saudi Aramco’s Ras Tanura refinery.
Both the S&P 500 and Nasdaq Composite Index were down around 1% on the day at the time of writing.
Polymarket bettors are pricing in about 56% odds of crude trading above $90 per barrel in March and a 44% chance of it crossing $100.
56% chance Crude Oil hits $90 in March. https://t.co/tSrdJI2gOt
— Polymarket (@Polymarket) March 1, 2026
Reacting, commentators predict Bitcoin’s short-term vulnerability if oil reaches $100, with inflation delaying rate cuts and triggering sell-offs below $60,000.
“Crude oil will go sharply higher, Gold sharply higher. Bitcoin and crypto will go lower,” crypto entrepreneur Anthony Pompliano wrote in part of an initial response on X.
Pompliano outlined what he described as “critical variables” in the conflict, including the status of the Strait of Hormuz, and how markets might respond.
Related: ‘This is not World War III:’ Five things to know in Bitcoin this week
If Iran attempts to close the Strait of Hormuz, “every commodity in the world reprices violently upward” while Bitcoin drops sharply, he said, adding:
“This is the single most important variable.”
“If Iran moves to close the Strait of Hormuz, oil could rip past $100-$108. That’s not just an oil story — it’s an inflation shock,” crypto analyst BBX said in a recent post on X, adding:
“Higher oil → higher inflation expectations → ‘higher for longer’ rates.”
However, Arthur Hayes, former CEO of crypto exchange BitMEX, argued that based on historical patterns, American intervention in the Middle East ultimately leads to Fed rate cuts or printing money to finance the war effort, a move he believes will drive Bitcoin prices higher.
“The longer Trump engages in the extremely costly activity of Iranian nation-building, the higher the likelihood the Fed lowers the price and increases the quantity of money to support Pax Americana’s latest bout of Middle Eastern adventurism,” he said in his latest essay.
Bullish for BTC? Oil price gains may be short-lived
Bitcoin and oil prices have exhibited a predominantly inverse relationship in the past, with the latter rising sharply immediately after conflicts emerge due to increased energy costs for BTC mining and broader market uncertainty.
However, spikes in oil prices tend to be short-lived, with Bitcoin outperforming over the longer term.
For instance, during the 2022 Ukraine crisis, crude oil spiked 50% while Bitcoin price dipped 18%. BTC went on to recover, however, rising 40% over the two weeks that followed.
A similar scenario played out after the Hamas attack on Israel in October 2023 and Israel’s attack on Iran in 2025, as shown in the chart below.
The current situation may be following a similar early-stage pattern.
Oil surged as much as 15% to $79 from a low of $69 on Thursday as traders reacted to rising tensions in the Middle East and the potential risk to key transit routes such as the Strait of Hormuz.
From a technical perspective, oil is seeking to break above its multi-year downtrend, an occurrence that has previously preceded 100%-200% Bitcoin price rallies, said analyst Max Crypto.
