Bitcoin and XRP Slide as Houthi Attacks Send Oil Surging

Yemen’s Houthi forces struck two Saudi oil tankers in the Red Sea on July 22 and declared a naval blockade against the kingdom, sending oil surging and knocking Bitcoin and XRP off their weekly highs. Bitcoin fell more than 1% to near $65,600. XRP dropped to $1.13 after stalling at $1.16 resistance, with futures open interest sliding toward $2.51 billion.

A sharper signal moved underneath the oil headlines. The 10-year Treasury yield closed in on a 52-week high while the dollar fell at the same time, a combination markets read as stagflation risk rather than plain war fear.

Houthis Hit Tankers Encelia and Layla, Declare a Blockade

Yemen’s Houthi militia said it targeted the tankers Encelia and Layla with ballistic missiles, cruise missiles and drones, accusing both vessels of violating a naval blockade the group had imposed on Saudi Arabia in the Red Sea. Saudi Arabia’s state news agency, SPA, confirmed a fire broke out on the bow of the Encelia and said all crew members were safe.

We targeted two Saudi oil tankers, named Encelia and Layla, for their violation of the blockade decision.

That is how Yahya Saree, the Houthi military spokesperson, described the operation, according to Al Jazeera’s report on the claimed attack. SPA’s own statement never named an attacker and gave no detail on the claimed strike against Layla. Five tankers changed course in the Red Sea that day, with two redirected toward the Suez Canal after the Houthis warned ships to avoid Saudi ports, according to ship tracking data cited by Reuters.

What we know:

• The Houthis say missiles and drones hit the tankers Encelia and Layla
• Saudi Arabia confirmed a fire on Encelia’s bow; all crew are safe
• Houthi leaders declared the blockade on Saudi shipping effective immediately

What’s unconfirmed:

• Saudi state media never said who attacked the ship and gave no detail on the claimed Layla strike
• The Houthis’ own claim that the blockade could cut global oil supply by 7% has not been independently verified

Saudi Arabia had been routing crude through the Red Sea and the Bab al-Mandeb Strait specifically to work around disruption in the Strait of Hormuz caused by the wider US-Iran war. That workaround is now the thing under attack.

The timing carried its own irony. Saudi Arabia’s energy ministry signed a 30-year agreement with Washington covering peaceful nuclear energy cooperation as its own tankers were coming under fire at sea. Google and Meta have already delayed undersea cable builds through the same corridor because of the conflict, a reminder that a Red Sea shutdown reaches past oil into telecoms infrastructure.

Bitcoin and XRP Slide as Oil Tops $88 a Barrel

US Central Command carried out its 12th consecutive night of strikes on Iranian military targets, hitting missile and drone storage, coastal surveillance sites and air defense systems, according to the source context behind this report. President Trump has warned he will hit Iranian bridges or power plants each time Iran fires on a ship in the Strait of Hormuz.

• Oil: crude climbed above $88 a barrel, up more than 31% since July 1, while Brent crude, the international benchmark, surged 4% to above $94 a barrel on Wednesday, its highest since June 8
• Dollar: the DXY dollar index slipped below 101.71
• Yields: the 10-year Treasury yield pushed near 4.70%, a fresh 52-week high and more than 70 basis points above where it sat when the war began
• Crypto: Bitcoin traded between $65,514 and $66,401 before settling near $65,600, with volume down 9%; XRP fell to $1.13 as volume dropped 32%

Trading volume falling alongside price is its own tell. Fewer traders are pressing the move, which points to positioning and de-risking more than a fresh wave of panic selling.

The Yield Curve’s Warning

Rising yields and a falling dollar do not usually travel together. Higher yields normally draw capital into the dollar. When they move in opposite directions during an energy shock, it typically means markets are pricing inflation eroding real returns faster than the currency can compensate.

That is not a new dynamic in this war. The Fed’s own account of its June meeting shows yields already up 50 basis points since the war began, even before this week’s fresh spike. Barchart, the market data provider, flagged the 30-year Treasury yield on July 22 as closing in on levels last seen before the 2008 crisis.

Bitcoin trades like a long-duration risk asset in that environment, not a hedge against it. A higher discount rate makes any asset priced on future cash flow or future adoption look less attractive today, and leveraged crypto positions get squeezed first when funding costs rise.

Notably, Bitcoin shrugged off a similar shock just a week earlier. When Iran threatened to close the Bab al-Mandeb Strait on July 16, gold and silver sold off hard while Bitcoin held its ground near $64,000. This week’s drop lines up more precisely with the yield spike than with the attack itself.

This War Already Failed the Safe-Haven Test Once

The current flare-up is a rerun. The US-Iran war ran from February 28 to June 17, 2026, before this month’s escalation reopened it, and it already produced a real-time test of which assets actually protect wealth during conflict.

BeInCrypto’s analysis of that stretch put it plainly: ‘Bitcoin behaved like a risk asset, not a haven.’ Stocks were the actual hedge. Gold and silver, the assets bought specifically for safety, delivered the weakest returns of the entire conflict.

Bitcoin’s current level near $65,600 sits well below that May peak and roughly in line with where it traded before this war began, which is its own kind of answer to the safe haven question.

Who Absorbs the Shock First?

Shipping insurers and leveraged crypto traders take the first hit. War-risk premiums on Red Sea transits have climbed since the Houthis expanded their target list to Saudi-flagged vessels, and XRP’s futures market just lost more than a billion dollars worth of open interest in four hours as traders cut exposure ahead of the Fed’s next move.

Maritime data firm Kpler tracked the chokepoint stress directly. Strait of Hormuz crossings fell 31% day on day to nine vessels on July 21, while Bab al-Mandeb crossings dropped 34% to 29, with four confirmed vessel U-turns near the Gulf of Aden, the firm said, warning that the pattern could ‘reshape routing decisions, increase freight costs and sustain higher geopolitical risk premiums.’

War-risk insurance for tankers transiting the region peaked at between 2.5% and 5% of a ship’s hull value in March, roughly $5 million per supertanker transit, up from about 0.125% before the crisis. That premium could climb again now that Saudi-flagged ships are explicit targets.

XRP’s open interest slide is its own story. The token’s futures market had just overtaken HYPE’s $2.6 billion open interest crown before this pullback, and perpetual contracts had also gone live on the prediction market Kalshi at zero fees days before the latest drop. Leverage built up fast, and it is unwinding just as fast.

A Fed Decision Lands Six Days Into the Storm

The Federal Open Market Committee meets July 28 and 29, with its decision due on the second day. The current target range sits at 3.5% to 3.75%, and most forecasters expect the Fed to hold rather than react to an oil-driven inflation spike with a single meeting’s worth of data.

Secretary of State Marco Rubio said this week that Washington remains open to a diplomatic solution, while accusing Tehran of failing to honor earlier commitments over the Strait of Hormuz. That leaves markets pricing risk with no clear diplomatic offramp in sight.

Investors are watching the same two numbers that moved Thursday: the 10-year yield and the dollar index. The Fed’s decision lands six days after the Houthis declared their blockade, with the target range still stuck at 3.5% to 3.75%.

Frequently Asked Questions

What Triggered the Houthi Blockade on Saudi Arabia?

The blockade followed some of the worst violence in Yemen in four years, after Yemen’s internationally recognized government bombed the Houthi-controlled Sanaa airport to stop an Iranian plane from landing. Houthi officials say the blockade aims to force Riyadh to lift its own embargo on Houthi-controlled ports and airports.

How Much Oil Actually Moves Through the Strait of Hormuz?

Roughly 13 million barrels a day pass through the Strait of Hormuz in normal times, about one-fifth of global oil consumption. The nearby Bab al-Mandeb Strait, now also under a Houthi blockade threat, carries a smaller but still significant share of east-west crude and container traffic.

Did Bitcoin Outperform Gold Earlier This Month?

Yes. When Iran threatened to close the Bab al-Mandeb Strait on July 16, gold and silver lost roughly $700 billion in combined value in a single session while Bitcoin held near $64,000, a rare win for crypto over metals. That resilience did not carry into this week’s selloff.

Will the Fed Cut Rates Because of the Oil Shock?

Most forecasters say no. Wells Fargo Investment Institute expects the Fed to stay on hold given elevated inflation risk, and Nuveen has stripped rate cuts from its 2026 outlook entirely, instead raising its year-end 10-year yield target to a range of 4.25% to 4.50%.

What Does Falling XRP Open Interest Actually Signal?

Open interest measures the total value of unsettled futures contracts. A drop, like XRP’s more than 1% decline to $2.51 billion in four hours, usually means leveraged traders are closing positions rather than opening new ones, a sign of fading conviction rather than fresh selling alone.

Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency and commodity markets are highly volatile, and all figures are accurate as of publication on July 23, 2026.