Iran Crisis: What Markets Are Missing

The Iran standoff has moved beyond headlines into real tail risk.

Since late December, Iran has faced its largest protests since 1979 as the rial collapsed nearly 90%. Reports suggest tens of thousands killed in an intense crackdown, alongside a weeks-long internet blackout.

At the same time, Iran can reportedly enrich weapons-grade uranium in under a week, expelled IAEA inspectors, and announced live-fire drills in the Strait of Hormuz — a route carrying ~20% of global oil flows. The U.S. has responded by deploying carrier groups and issuing strike warnings.

Markets Are Too Calm

Oil near $64 reflects supply surplus thinking, not geopolitical reality. Iran doesn’t need full conflict — mines, drones, or shipping uncertainty alone could sharply raise insurance costs and disrupt flows through Hormuz.

Bitcoin briefly surged above $95K on safe-haven demand, but the narrative is mixed. A significant share of Iran’s crypto activity is reportedly linked to regime-connected wallets, making BTC both an escape tool and a sanctions workaround.

The Risk

Iran faces economic collapse, regime legitimacy crisis, and nuclear brinkmanship — all at once. Every option is costly: escalate and risk strikes, de-escalate and appear weak, or repress protests and fuel instability.

Bottom Line

Markets are pricing a controlled outcome. They’re underpricing tail risks: internal collapse or sustained Hormuz disruption.

That’s where the real volatility lives.

$BTC