Wintermute Warns Crypto Market Vulnerable to Oil Prices and Geopolitics

The crypto market may soon be more heavily influenced by oil prices and geopolitical events in the region of the Strait of Hormuz, according to Wintermute analysts. They believe that if Brent crude stays above $100 per barrel, it will push up credit rates in the US.

Brent is currently trading at around $103 per barrel, but only part of the pre-US war with Iran supply volumes are passing through the Strait of Hormuz. If oil supplies continue to decline, Wintermute thinks high prices may become entrenched, increasing inflationary pressure and posing an additional risk factor for assets sensitive to macroeconomics.

The yield on ten-year US government bonds has risen above 5%, making conservative instruments more attractive to investors. This could limit demand for cryptocurrencies as some capital flows into lower-risk investments.