Bitcoin Surges Past $78,000 as Iran Opens Strait of Hormuz

Bitcoin's price has surged to over $78,000 after a significant development in the Strait of Hormuz. Iran declared the waterway fully open for commercial ships, which has led to a crash in oil prices to $85.90 per barrel. This move is seen as a major shift in favor of Bitcoin, as it removes one of the key factors that had been holding its price back since the start of the war.

The Strait of Hormuz carries around 20% of the world's oil supply, and keeping it shut has led to high oil prices and a corresponding pressure on cryptocurrency prices. However, with oil now below $90, the situation is looking more favorable for Bitcoin. The Federal Reserve (FOMC) meeting is just 11 days away, and the Fed will be looking at an $85 oil price instead of $100.

The Coinbase Premium Index has also hit its highest level since October 2025, indicating a strong demand from US spot buyers. Over $1 billion in short positions were stacked above $77,000 before the price surge, which is now getting liquidated as the price pushes through. This adds fuel to the rally and confirms broader participation in the market.

While there is still a risk that Iran could close the strait again and send oil prices back above $100, the current setup is stronger than previous developments. Over 40 countries are meeting in Paris to plan a joint mission to keep the strait open, which provides more stability to the situation. If oil stays below $90, a realistic target of $80,000 in Bitcoin's price seems achievable within the next week or two.