Bitcoin’s outlook in the aftermath of Epic Fury

Additional analysis by Matt Mena. Notable contributions by Stephen Coltman and Eliezer Ndinga.

Two weeks into Operation Epic Fury, the full scope of the resulting oil crisis is becoming clear. The coordinated US-Israeli campaign has unleashed consequences that go well beyond the energy market – yet crypto has held up surprisingly well. As of March 16, Bitcoin is up 13% on the month, and the total crypto market cap is up 12.5%, while the S&P 500 is down 3.7%, bonds are up 10%, gold is down 6.5%, and silver is down 15%.

Last week, we began to chart market reverberations following the operation’s launch. As the global economy navigates the financial aftermath, we map out the three hypothetical scenarios we believe are most likely to unfold for Bitcoin, the emerging flight-to-safety asset in a new era of geopolitical volatility.

• The pivot: Resolution within 1 month – the bull case – which carries Bitcoin on a narrative shift. 
• The friction: Gray zone for 3-6 months – the base case – where Bitcoin experiences a period of quiet accumulation. 
• The systemic reset: Full escalation spanning over 6 months – the bear case – upholding Bitcoin as a necessity after an initial crash. 

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Hypothetical macro scenarios: from best to worst

The pivot: Resolution within 1 month

The Strait of Hormuz’s closure proves temporary, with military or diplomatic intervention restoring tanker traffic within roughly a month. Oil spikes above $90 but consolidates in the $70s before settling towards the $60s as the corridor reopens. The Federal Reserve treats the spike as transitory and continues easing.

However, the shock leaves a lasting mark on how sovereign risk is perceived. The BRICS interpret the strikes as evidence that the dollar functions as a weaponized currency. The dollar may remain strong, but its monopoly over settlement begins to erode (USD was up to 71%¹ of global reserves in 1991; this is now down to 57%² in 2025), accelerating efforts to diversify toward gold-linked trade, local-currency energy-related arrangements, and emerging onchain infrastructure. Gold retains a ‘fear premium’ near record highs as central banks continue to diversify reserves. In this scenario, the macro environment gradually stabilizes even as geopolitical trust in sovereign settlement systems continues to erode.

The friction: Gray zone for 3-6 months

The Strait of Hormuz remains a precarious gray zone: shipping continues at a reduced capacity with elevated insurance premiums, while proxy groups (such as the Houthis and Hezbollah) maintain attacks without centralized Iranian command. The increasing influence of Mojtaba Khamenei, whose immediate family members were killed in the strikes, further diminishes the prospect of diplomatic compromise, resulting in a conflict where no clear authority seems willing to negotiate.

Oil continues to trade in the $85-$105 range. Historically, a 10% increase in oil prices adds roughly 0.15-0.2% to Price Consumer Expenditure (PCE) inflation within three to six months³. With PCE at 2.9% and Q4 GDP at just 1.4%, headline inflation could push toward 3.5-3.7% even as growth stalls.

This dynamic directly feeds into monetary policy. The Fed is caught between inflation and growth: energy-driven price pressures limit rate cuts, while weakening industrial activity constrains further tightening. That relationship, however, is not mechanical: during the 2007-08 oil shock, the Fed cut rates by more than 300 bps even as crude surged toward $150 per barrel amid mounting recession risks. 

The Federal Open Market Committee (FOMC) meeting scheduled for March 17-18 will be critical in determining whether policymakers treat the current spike as temporary and look through the resulting inflation. However, at sustained oil levels, the window for cuts narrows further, raising the possibility of a prolonged sideways period for traditional equities.

Meanwhile, logistical constraints are limiting the physical oil market. While Saudi Aramco⁴ is rerouting crude to Yanbu on the Red Sea and the UAE⁵ is utilizing its Fujairah bypass, these routes combined can handle up to ~6 million barrels per day⁶. This is significantly less than the 20 million barrels per day that typically flows through Hormuz, leaving over two-thirds of the oil without an alternative transport route. Current estimates place global inventories at 8.2 billion barrels⁷ (more than 400 days of coverage); however, the issue is logistical, not a shortage of crude: the oil is available, but it cannot reach refineries quickly enough.

In that environment, gold becomes a portfolio staple as a hedge against persistent stagflation, as it did during the 1973 oil embargo, when it rose roughly 35% within three months. Trade finance tightens as insurers blacklist the Gulf, while shipping cost volatility creates a sudden risk of recession in energy-dependent emerging markets.

The systemic reset: Full escalation spanning over 6 months

In a full-scale regional war involving Saudi Arabia and the UAE, the Strait of Hormuz is closed for an extended period. Oil breaches $150⁸ amid fragmented global supply chains, while gold surges past $6,000 under extreme monetary stress.

At the same time, the conflict expands into the financial domain. Iran complements physical attacks with cyber operations targeting financial infrastructure. Precedents include Operation Ababil⁹, which disrupted online banking at 46 US financial institutions, and the Shamoon attack on Saudi Aramco¹⁰, which wiped out roughly 30,000 corporate computers.

In an escalation scenario, the economic impact would likely propagate through three channels: 

• Banking downtime: customers temporarily unable to access deposits. 
• Payment rail disruption: delays in Automated Clearing House (ACH), card networks, and international settlements.
• Market settlement risk: interruptions to clearing infrastructure during periods of stress. 

Even short-lived disruptions can amplify instability by reducing liquidity and increasing settlement uncertainty. The narrative of such attacks alone can send the market into freefall, as seen in 2013 when the Syrian Electronic Army hacked¹¹  the Associated Press Twitter (now X) account to falsely report explosions at the White House. Within seconds, high-frequency trading algorithms ingested the headline and triggered a massive sell-off, erasing $136 billion¹² in value from the Dow Jones in just three minutes. This flash crash demonstrated how cyber/social manipulation can weaponize market automation to create instantaneous, systemic panic.

Summary of scenarios

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Where is Bitcoin now?

On February 28, the day the strikes began, BTC rose 1.74%, defying the risk-off pattern that historically produces 4-8% drawdowns for bitcoin in the early days of geopolitical shocks. It has since rallied ~10.5% from its post-strike low to its March 4 peak. The March 2023 banking crisis offers a useful analogy: as traditional financial rails faltered, bitcoin gained roughly 40% in two weeks during a flight to non-sovereign assets. 

This shift is also visible in investor positioning and onchain flows: 

• In the US, spot Bitcoin exchange-traded funds (ETFs) have recorded roughly 7,800 BTC (~$530 million) in net inflows since March 2.
• Over the same period, roughly 60,000 BTC (~$4.2 billion) left exchanges between March 2-7, while long-term holders accumulated ~61,000 BTC (~$4.27 billion), since February 28. 

All of this confirms that capital is moving into long-term storage rather than exiting the market, indicating a shift in these flows and pointing to a growing role for Bitcoin. 

Still, caution is warranted: Supply in profit currently sits near 57%, a level more typical of a transitional phase than of full capitulation. Historically, this metric has fallen to 45-50% at major cycle bottoms, including the 2018 bear market and the FTX collapse in 2022. Given the overall holders' current cost basis, reaching that range would likely imply Bitcoin trading between $50,000 and $58,000. At the same time, short-term (1 week and 1 month) holders also have a cost basis near $70,000, creating potential overhead selling pressure on any retest of that level.

The current market is not rallying from strength; it is simply resisting to break. Should Bitcoin sustain its present price levels despite an energy shock, slowing economic growth, and unclear monetary policy, the pace of repricing could accelerate once global liquidity conditions improve. 

In a prolonged conflict scenario, Bitcoin increasingly plays a dual role: a technology bet in developed markets and a survival tool for cross-border trade, wealth storage, and hedging against failing economies.

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The order of monetary repricing

When confidence in the monetary system comes under pressure, assets don't reprice all at once – they move in sequence. 

Stablecoins shift first, as they only require capital to move across digital rails rather than a complete loss of faith in fiat currency. 

Gold follows next, and the groundwork is already laid: central banks purchased 863 tonnes in 2025¹⁷, extending a four-year accumulation trend not seen since the post-Bretton Woods realignment of the 1970s. Gold doesn't need a systemic crisis to reprice – persistent inflation is enough, and that's already here.

Out of the three, bitcoin moves last. It only reprices once the shock outgrows transactional disruption and becomes a genuine loss of confidence in the sovereign monetary order itself – dollar weaponization, clearing-system fragmentation, or a formal split into competing blocs. 

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Market structure and technical outlook

Macro narratives set the direction, but market structure determines the path. The levels below are based on onchain data, positioning, and historical patterns rather than any specific geopolitical outcome.

A sustained break above $75,000 on volume would suggest that a more sustained bullish environment is taking hold. The next targets are the $80,000-$90,000 range, with potential catalysts including a rate-cut probability exceeding 40% in July or progress on the Clarity Act in H1 2026. Conversely, if negative factors dominate and we break below $65,000, risks extend toward $58,000-$60,000 and potentially the $50,000 capitulation zone. 

Two key levels to watch are Bitcoin’s realized price and the 200-week moving average, both of which have historically served as long-term support for Bitcoin. Currently, the realized price is $54,500, with the 200-week moving average at $59,000. A move back toward the $70,000 cost basis would be a key inflection point: a rejection there would confirm bearish momentum, while a reclaim would remove a layer of overhead supply.

One mitigating factor is leverage. Futures open interest remains more than 50% below last October’s peak, indicating positioning is far less extended than in previous cycles. With funding rates near neutral rather than deeply negative, the market appears less crowded, reducing the risk of large liquidation cascades.

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The real question

The three scenarios outlined highlight that Bitcoin’s response depends less on oil prices themselves and, in the medium - to long-run, more on how geopolitical shocks affect trust in the monetary system and the inflation outlook.

Therefore, the key question for investors is not whether geopolitical shocks initially hurt Bitcoin – they often do in the short term - but whether they soften over the medium term, when Bitcoin historically outperforms. The real question is whether those shocks accelerate the long-term shift toward politically neutral financial infrastructure.

Oil shocks test monetary policy. Monetary stress tests financial systems. And when trust in those systems erodes, capital begins searching for alternatives. The key question is whether Bitcoin can evolve into a politically neutral reserve asset in an increasingly fragmented financial system. That remains the central uncertainty of this cycle.

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Footnotes: 

1. IMF. (2021, May 5). US dollar share of global foreign exchange reserves drops to 25-year low. https://www.imf.org/en/blogs/articles/2021/05/05/blog-us-dollar-share-of-global-foreign-exchange-reserves-drops-to-25-year-low
2. Reuters. (2025, December 22). IMF reserve data shows stabilisation in third quarter. https://www.reuters.com/world/asia-pacific/imf-reserve-data-shows-stabilisation-third-quarter-2025-12-22/
3. Federal Reserve. (2023, December 15). Second-round effects of oil prices on inflation in the advanced foreign economies. https://www.federalreserve.gov/econres/notes/feds-notes/second-round-effects-of-oil-prices-on-inflation-in-the-advanced-foreign-economies-20231215.html
4. Caliber. (n.d.). Saudi Aramco considers alternative routes to bypass Strait of Hormuz. https://caliber.az/en/post/saudi-aramco-considers-alternative-routes-to-bypass-strait-of-hormuz
5. Hormuz unrest exposes limits of Gulf oil export alternatives. (2026, March 6). The National News. https://www.thenationalnews.com/business/energy/2026/03/06/hormuz-unrest-exposes-limits-of-gulf-oil-export-alternatives/
6. IEA. (n.d.). Oil security and emergency response: Strait of Hormuz. https://www.iea.org/about/oil-security-and-emergency-response/strait-of-hormuz
7. Hormuz unrest exposes limits of Gulf oil export alternatives. (2026, March 6). The National News. https://www.thenationalnews.com/business/energy/2026/03/06/hormuz-unrest-exposes-limits-of-gulf-oil-export-alternatives/
8. CNBC. (2026, March 9). Oil prices, Iran war, Middle East, US, Israel, Strait of Hormuz. https://www.cnbc.com/2026/03/09/oil-prices-iran-war-middle-east-us-israel-strait-of-hormuz.html
9. EBSCO. (n.d.). Operation Ababil (2012). https://www.ebsco.com/research-starters/political-science/operation-ababil-2012
10. Security Affairs. (n.d.). Saudi Aramco: War of information on the cyber attack. https://securityaffairs.com/11131/hacking/saudi-aramco-war-of-information-on-the-cyber-attack.html
11. The Washington Post. (2013, April 23). Syrian hackers claim AP hack that tipped stock market by $136 billion. Is it terrorism? https://www.washingtonpost.com/news/worldviews/wp/2013/04/23/syrian-hackers-claim-ap-hack-that-tipped-stock-market-by-136-billion-is-it-terrorism/
12. IT News. (n.d.). Associated Press Twitter hack moves markets. https://www.itnews.com.au/news/associated-press-twitter-hack-moves-markets-340927
13. OilPrice.com. (n.d.). Brent. https://oilprice.com/futures/brent/
14. Federal Reserve. (2023, December 15). Second-round effects of oil prices on inflation in the advanced foreign economies. https://www.federalreserve.gov/econres/notes/feds-notes/second-round-effects-of-oil-prices-on-inflation-in-the-advanced-foreign-economies-accessible-20231215.html
15. Trump advisers urge him to find Iran exit ramp, fearing political backlash. (n.d.). The Wall Street Journal. https://www.wsj.com/world/middle-east/trump-advisers-urge-him-to-find-iran-exit-ramp-fearing-political-backlash-562fef1e
16. IUA. (n.d.). JWLA-033: Iran. https://www.iua.co.uk/IUANew/UnderwritingItems/Committees/Joint_War_Committee/JWLA-033-Iran.aspx
17. World Gold Council. (n.d.). Gold demand trends: Full year 2025. https://www.gold.org/goldhub/research/gold-demand-trends/gold-demand-trends-full-year-2025
18. Glassnode Studio. (n.d.). Price Realized USD by Age. https://studio.glassnode.com/charts/breakdowns.PriceRealizedUsdByAge?a=BTC&mAvg=7&s=1481644038&u=1773014400&zoom=

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