Wall Street went all in on crypto last week. Then Iran shut the Strait again. Is the Crypto trade still on?
Kevin Nyaga6 min read·Just now--
Yes. But not for the reasons the price action this weekend would suggest.
Bitcoin is trading at $76,091, down from a high of just above $78,000 reached Friday after Iran declared the Strait of Hormuz fully open. By Saturday evening in Asia, that declaration had been reversed. Iranian state media announced the waterway had returned to “strict management and control by the armed forces.”
Two tanker owners told Bloomberg their vessels received Iranian radio transmissions shutting the strait. One supertanker reported gunfire and aborted transit. Oil tankers that had raced toward the strait on Friday’s reopening news turned back. The breakout that looked like a regime change lasted less than 24 hours.
The price pattern is now mechanical. Ceasefire headline arrives. Risk assets rally. Bitcoin squeezes. Reversal headline arrives before the breakout can consolidate. The forced unwind sets up the same trade again. This cycle has repeated enough times that it is no longer surprising, but it is still violent. Friday’s move triggered approximately $762 million in crypto liquidations, the majority from short positions, with Bitcoin accounting for roughly $382 million and Ethereum $167 million.
Shorts outweighed longs by nearly four to one going into the event, the cleanest short-heavy setup in a liquidation since February. Funding rates on Bitcoin perpetuals had been pinned negative for weeks, meaning shorts were paying longs a premium to hold their positions.
The Hormuz reopening was the catalyst that flipped it. Crude oil dropped nearly 10% to $85.90 per barrel on the initial headline, Bitcoin broke above the $76,000 to $78,000 resistance zone that had capped every rally attempt since the February crash, and the squeeze did the rest.
Trump told reporters Friday night that Iran had agreed to an “unlimited” suspension of its nuclear program. Tehran never confirmed it. None of it survived into Saturday intact.
What actually happened this week that matters
The Hormuz whipsaw is the headline. It is not the story. While Bitcoin was oscillating between geopolitical hope and disappointment, the most consequential week for institutional crypto adoption in years was unfolding in boardrooms and regulatory filings that received a fraction of the coverage the price moves did.
Goldman Sachs filed with the SEC to launch its first Bitcoin-linked ETF. The proposed Bitcoin Premium Income ETF will not hold Bitcoin directly but will invest in spot Bitcoin ETFs and layer a covered-call strategy on top to generate yield from Bitcoin’s volatility.
At least 80% of net assets will be tied to Bitcoin-linked investments, with options potentially covering 40% to 100% of exposure.
Goldman is packaging Bitcoin into an income product, which tells you exactly who the target investor is: institutions and wealth management clients who want crypto exposure with a yield component and defined risk parameters. This is not speculative positioning. It is product engineering for a client base that has been waiting for precisely this structure.
Morgan Stanley did not wait. Its spot Bitcoin ETF, trading under the ticker MSBT, attracted more than $100 million in its first week after a slow start, the most successful ETF launch in the bank’s history.
Source: X
The fund’s 0.14% expense ratio, the lowest among comparable products, combined with Morgan Stanley’s global wealth management distribution network, gave it a structural advantage from day one. BlackRock’s IBIT remains the category leader at $53 billion in assets, but Morgan Stanley’s entry signals that the distribution race among traditional finance firms is now fully underway.
Charles Schwab moved simultaneously. The firm launched Schwab Crypto, a phased rollout of direct spot Bitcoin and Ethereum trading through a dedicated crypto account linked to existing brokerage profiles. Paxos will handle sub-custody and trade execution under a federally supervised framework.
Schwab manages $12.5 trillion in client assets and has 46 million customers, 5% of whom were already holding crypto elsewhere because Schwab did not offer it. That addressable market is now being pulled in-house.
The NYSE’s parent company, Intercontinental Exchange, invested approximately $200 million in OKX, valuing the crypto exchange at $25 billion. ICE will license OKX’s spot crypto prices and launch US-regulated futures contracts tied to them. NYSE is also developing a tokenised securities platform with Securitize that would offer 24/7 trading and instant settlement using stablecoins. A 233-year-old institution is rebuilding its core infrastructure on blockchain technology. That is not a pilot programme. That is a strategic pivot.
Why the trade is still on
The Hormuz whipsaw creates noise. The Wall Street adoption story creates a signal. These are not the same thing operating on the same timeframe, and conflating them is how traders end up reactive rather than positioned.
The structural case for Bitcoin has not changed because Iran reversed a 24-hour reopening. Goldman filing an ETF is not a trade on the Strait of Hormuz, it is a multi-year product decision driven by client demand that will persist regardless of what happens in the Persian Gulf this weekend.
Schwab’s spot trading launch was not triggered by ceasefire optimism and will not be cancelled by its reversal. Morgan Stanley’s $100 million first week reflects wealth management clients who have been waiting for a regulated, low-cost vehicle from a trusted brand. That demand existed before this week’s geopolitical whipsaw and will exist after it.
The short squeeze setup that drove Friday’s move is now partially reset. Funding rates spiked during the rally and will need time to normalise. The $76,000 to $78,000 resistance zone that Bitcoin briefly broke through has reasserted itself as the ceiling. A clean break and hold above it requires either a sustained geopolitical resolution, which the Hormuz reversal suggests is not imminent, or enough institutional buying pressure to overwhelm the macro noise independently.
The Fed’s balance sheet is expanding again after turning down from its 2022 peak.
Source: FRED
The ISM Manufacturing PMI has posted three consecutive months of expansion.
Source: Investing.com
Stablecoins processed more monthly volume than ACH bank transfers for the first time. Luxembourg’s sovereign wealth fund has already allocated 1% to Bitcoin. The structural backdrop is the most constructive it has been in years.
Bitcoin at $75,087 after a $78,000 breakout that failed in 24 hours looks like a setback. In the context of everything that happened in boardrooms and regulatory filings this week, it looks more like an entry point that the Hormuz whipsaw conveniently reset.
The trade is still on. The timeframe just requires more patience than a 24-hour news cycle allows for.
Bitcoin technical outlook
Bitcoin’s recent recovery is approaching a key inflection point, with price pressing up against the 78.5k resistance zone after rebounding from the 65.9k support area. This level has acted as a ceiling in recent sessions, and a sustained move above it would signal further upside within the broader recovery structure. On the downside, 65.9k remains a critical support, marking the base of the recent consolidation range.
Bollinger Bands have started to widen again following a period of contraction, reflecting a pickup in volatility as price pushes higher toward the upper band, typically consistent with strengthening momentum, but also periods where price may pause or consolidate.
RSI is holding in the mid-60s, slightly easing from recent highs, suggesting bullish momentum remains intact but is no longer accelerating. This leaves the market positioned for either a continuation higher if resistance gives way, or a short-term pullback as momentum cools near overhead supply.
Source: TradingView
