Bitcoin has worked its way back above $65,000 after falling below $59,000 at the beginning of July, with modest exchange-traded fund inflows and hopes of friendlier monetary policy bringing more buyers into the market. However, oil may now decide how much further that recovery can travel.
Brent crude touched $95.47 a barrel on Tuesday morning, its highest level in months and a jump of more than 3.5% from where it stood just 24 hours ago.
Bitcoin's Uneasy Calm
The latest increase in the Brent crude price came after two Saudi tankers reportedly reversed course in the Red Sea following threats from Yemen’s Iran-aligned Houthis, adding another vulnerable shipping route to a conflict already affecting movements through the Persian Gulf. President Trump also warned of further strikes on Iranian targets and threatened retaliation if Houthi rebels disrupt shipping in the Red Sea.
Interestingly, Bitcoin has so far absorbed the oil shock with less violence than earlier rounds of the conflict, trading near $65,950 at the writing, modestly lower by 0.4% on the day and well off the roughly $62,000 lows it touched during the sharpest bouts of the ceasefire's collapse.
Spot Bitcoin ETFs have also returned to positive territory, attracting approximately $181 million as Bitcoin climbed above $65,000. At the time of writing, U.S.-listed spot Bitcoin ETFs had recorded about $430 million in net inflows during the first two trading days of the week, already making this their strongest weekly performance since the first week of May.
Next Oil Move Could Decide Bitcoin’s Recovery
Bitcoin has already demonstrated that geopolitical conflict does not automatically produce a lasting collapse. When the US-Iran ceasefire broke down earlier in July, and oil jumped, Bitcoin fell below $62,000.
The next news event may be more difficult for Bitcoin. Each de-escalation attempt in the Middle East has proven fragile, and that instability is precisely why oil prices have become the first variable most investors are looking at. At the time of writing, Brent has fallen back toward $88 a barrel with hopes that peace negotiations between the US and Iran could resume.
However, Treasury yields are high, and economists have become increasingly concerned that the Fed may need to keep rates unchanged for the rest of 2026. A recent Reuters poll found that most economists expected the policy rate to remain at 3.50%-3.75% through to the end of the year, while a growing number also considered the probability of another rate increase to be high.
If the Brent crude oil price avoids a sporadic spike and shipping disruptions are contained in the Strait of Hormuz, Bitcoin may be able to hold its recovery back towards $70,000.