Bitcoin Holds Near $64,800 as Hormuz Optimism Offsets Crypto Market Headwinds

Bitcoin edged higher on Wednesday but remained trapped in a narrow trading range, as improving geopolitical sentiment helped stabilize risk appetite while persistent crypto-specific challenges continued to limit upside momentum.

The world's largest cryptocurrency rose 0.8% to US$64,829 during U.S. trading hours, supported by reports that the United States, Oman, and Iran are working toward an agreement to reopen the Strait of Hormuz—a critical global energy shipping route. Optimism surrounding a potential breakthrough eased concerns over oil supply disruptions, sending crude prices lower and improving sentiment across broader financial markets.

However, Bitcoin's gains remained modest as investors balanced the geopolitical relief against ongoing pressures within the digital asset sector. Market confidence has recently been weighed down by a major cryptocurrency hack and additional Bitcoin sales by Strategy, one of the world's largest corporate Bitcoin holders, reinforcing caution despite improving macro conditions.

Institutional demand, meanwhile, showed signs of recovery. Spot Bitcoin exchange-traded funds (ETFs) attracted US$381.6 million in net inflows so far in August, following US$172.4 million in July after two consecutive months of significant outflows. The improving trend suggests some investors are gradually rebuilding exposure as broader market risk appetite stabilizes. Even so, Bitcoin remains around 50% below its record high reached in October, highlighting that the market is still recovering from a prolonged downturn.

Elsewhere in the digital asset market, Ethereum gained 2% to US$1,910, while Solana and BNB posted modest advances. XRP, Cardano, and several meme tokens traded lower, reflecting mixed sentiment across major altcoins.

Adding to the sector's institutional narrative, stablecoin issuer Circle reported stronger-than-expected second-quarter earnings. Revenue and reserve income increased 7% year over year to US$701.3 million, supported by growing enterprise adoption of USDC. The company's USDC circulation rose 19% to US$73.3 billion, while on-chain transaction volume surged 151% from a year earlier, underscoring continued expansion in stablecoin usage beyond cryptocurrency trading.

Why It Matters for Traders

Bitcoin's muted rebound illustrates that macroeconomic optimism alone may not be enough to drive a sustained rally while crypto-specific risks remain unresolved. For traders in Southeast Asia, attention is likely to remain focused on three key catalysts: developments surrounding the Strait of Hormuz negotiations, the pace of spot Bitcoin ETF inflows, and signs of renewed institutional participation.

A successful Hormuz agreement could continue supporting broader risk assets by easing energy market uncertainty. However, sustained upside for Bitcoin may require stronger capital inflows and improved confidence in the digital asset ecosystem, particularly as investors continue comparing cryptocurrencies with technology stocks that currently offer clearer earnings visibility.