Bitcoin and broader financial markets, including gold and U.S. equities, dropped sharply following a prime-time address by President Donald Trump on Wednesday, in which he provided an update on the U.S. military campaign against Iran. The operation, codenamed Operation Epic Fury, has been underway for one month. Trump declared significant progress, stating that Iran’s navy had been destroyed, its air force severely damaged, key militant leaders eliminated, and the country’s missile capabilities substantially reduced.
Trump framed the campaign as necessary to prevent Iran from obtaining nuclear weapons, and said core objectives are close to being achieved. He warned that the U.S. would continue striking Iran intensively over the next two to three weeks. He concluded his remarks by predicting the country would emerge safer, stronger, and more prosperous as a result of the operation.
Financial markets responded negatively to the address. The S&P 500 fell roughly 2%, while gold declined approximately 4%. Crude oil moved in the opposite direction, rising from $98 to $107 per barrel. The market reaction reflected investor concern over the continued uncertainty surrounding the conflict and its implications for global energy supply.
The crypto selloff was compounded by weakening institutional interest. Spot Bitcoin exchange-traded funds (ETFs) ended a four-week inflow streak, recording a $296.18 million outflow last week, according to data from SoSoValue. The current week has seen modest positive inflows of $13.35 million, though that follows a $173.73 million outflow recorded the previous day.
Jeff Mei, chief operating officer of crypto exchange BTSE, said risk assets are falling because Trump’s speech offered no indication that he planned to reopen the Strait of Hormuz. The strait is a critical chokepoint for global oil and gas shipments, and its status has become a focal point for market participants tracking the conflict’s economic fallout. Mei noted that even if hostilities were to end, it could take months to secure the strait and potentially longer to restore regional energy production to prior levels.
Prediction market Myriad reflects the persistent uncertainty. Users on the platform now place a 74% probability on crude oil reaching $120 per barrel as its next major move, up from a low of 69% on Wednesday. Additionally, Myriad users assign a 54% chance that the average number of ships transiting the Strait of Hormuz will remain below 15, highlighting ongoing concerns about regional stability and shipping disruptions.
Mei warned that the prolonged disruption to energy supply chains could hinder economic growth across multiple countries, which in turn would weigh on crypto prices. The combination of geopolitical risk, reduced institutional inflows into Bitcoin ETFs, and rising oil prices has created a challenging environment for digital assets. Analysts and market participants are closely watching developments in the region for any signs of de-escalation that could stabilize sentiment.
Originally reported by Decrypt.
