Bitcoin traded close to $86,000 on Tuesday as U.S. stocks posted modest gains and crude oil declined following reports that Iran could reopen the Strait of Hormuz within seven days.
WTI crude fell to around $89 a barrel, down more than 2.5% at its session low and about 15% below its September peak. Brent crude also slipped under $98 as reports cited a senior Iranian official saying the Strait could reopen if the U.S. eased military pressure and lifted its port blockade.
The decline in oil prices could benefit broader risk assets if Middle East tensions continue to ease. Lower energy costs may help contain inflation and reduce pressure for further interest-rate increases.
Bitcoin was around $86,000, up more than 1% over 24 hours. However, it remained roughly 1.5% below Monday’s high above $87,000 after briefly reaching approximately $87,300 during the rally.
The initial oil sell-off was partly reversed after Iranian sources disputed reports about a potential Hormuz reopening. LiveSquawk, citing Fars News Agency, said Iranian officials rejected reports from Kyodo and Reuters that Tehran was willing to reopen the Strait if Washington ended its blockade. WTI futures later recovered to about $90.20 after touching $89.16.
U.S. equities were slightly higher shortly after Tuesday’s open. The Nasdaq gained 0.4%, while the S&P 500 added 0.1%, as markets settled after Monday’s stronger moves.
Technology stocks led some of the gains, with SanDisk up 6.7% and Google rising 1.9%. Financial shares were weaker, with JPMorgan, Wells Fargo and Citigroup each falling about 1%. The sector continues to face pressure from the Federal Reserve’s new rate-hike cycle and the resulting flattening of the yield curve, which can weigh on lenders’ margins.
In crypto-related financial news, SoFi has begun using its SoFiUSD stablecoin to settle payments generated by its $25 billion debit and credit card program through Mastercard’s network.
The system allows stablecoin-based settlement to take place in the background, so merchants do not have to accept or hold SoFiUSD. The stablecoin is issued by SoFi Bank, a nationally chartered U.S. bank, and is redeemable for dollars at a 1:1 ratio.
SoFi is also engaging with large U.S. merchants and plans to investigate cross-border payments and remittance use cases with Mastercard.
SoFi shares are down 37% year to date despite business growth. Second-quarter adjusted net revenue increased 40% to $1.2 billion, while membership climbed to 15.8 million. Rising Treasury yields, valuation concerns and greater lending exposure have nevertheless weighed on the stock.
Bitcoin’s derivatives market is also facing a major event Friday, when roughly $14 billion in BTC options are scheduled to expire on Deribit. Ledn co-founder Mauricio Di Bartolomeo described the expiration as the largest single expiration date of the year.
Di Bartolomeo said September’s quarterly expiration consists of two stages, with the first taking place last week when options tied to BlackRock’s IBIT expired. He described that event as the largest IBIT options expiration on record.
The IBIT options were heavily weighted toward calls, with maximum pain near $40 per share. Bitcoin’s move through $80,000 pushed a substantial portion of those calls above their strike prices, increasing hedging pressure on dealers that had sold them.
For IBIT, dealer hedging can involve buying ETF shares, while the creation of additional spot bitcoin ETF shares requires purchasing the underlying bitcoin. This can transmit options-related demand into the BTC market.
Friday’s Deribit expiration has large call concentrations at $85,000 and $100,000, with bitcoin already trading above the lower level.
Gold was little changed over the previous 24 hours at approximately $4,336 an ounce, while bitcoin continued to consolidate near $86,000.
