Rising tensions in the Strait of Hormuz are pushing oil higher and putting Bitcoin under pressure. Oil is up more than 60% since the start of 2026, a sharp move tied to fears around a chokepoint that carries about 20% of the world’s daily oil and roughly 35% of seaborne oil shipments. Any disruption there hits energy markets fast. For crypto, the effect is clear: as geopolitical risk rises, investors tend to cut exposure to volatile assets, and Bitcoin is part of that group.
CryptoQuant analyst Darkfost said that, historically, periods when oil regains strength often line up with end-of-cycle phases for BTC. He added that these episodes usually reflect geopolitical stress, conditions that do not favor risk-taking or larger allocations to speculative assets. If higher oil prices keep feeding inflation concerns, the pressure can spread across broader financial markets, leaving Bitcoin and similar assets in a more fragile trading setup.
Exchange-held Bitcoin drops back to 2019 range
At the same time, the amount of Bitcoin sitting on exchanges has kept shrinking. Exchange reserves have now fallen to levels last seen in 2019. The decline has been steady since 2022, with the collapse of FTX acting as a major turning point. In November 2022 alone, more than 325,000 BTC left exchanges.
Total exchange reserves now stand at about 2.7 million BTC. Binance holds around 20% of that supply, while investor-focused venues such as Coinbase Advanced control a large share as well, at roughly 800,000 BTC. This is more than a simple withdrawal trend. It points to a deeper shift in how Bitcoin liquidity is distributed across the market.
ETFs and treasury holders are absorbing liquid supply
Two developments have accelerated the move. First, the launch of spot Bitcoin ETFs in January 2024 removed about 1.3 million BTC from exchange liquidity. Second, Digital Asset Treasuries collectively hold around 1.1 million BTC as reserve assets. As more of that supply sits inside long-term institutional structures, the amount of Bitcoin readily available for trading becomes tighter.
Darkfost said these ETF and corporate holdings give Bitcoin a different dimension. The market is becoming more mature, but also less flexible. As a larger share of BTC gets locked inside institutional frameworks, long-term liquidity conditions and price formation may shift with it.