The Senate limited Trump's military powers over Iran: Bitcoin's reaction was zero.
On Tuesday, the U.S. Senate passed a joint resolution aimed at limiting Donald Trump's military powers in the ongoing conflict with Iran. This is the first time in history that both chambers of Congress have agreed on such a measure. However, despite the uniqueness of the event, financial markets, including the cryptocurrency market, perceived it as a mere formality.
A historic decision already priced in by markets
Four Republicans supported the resolution alongside Democrats. Among them were Bill Cassidy, Susan Collins, Lisa Murkowski, and Rand Paul. Only one Democrat, John Fetterman, voted against it. Congress had previously attempted to invoke the 1973 War Powers Act against a sitting president: in 2020, following the strike on Soleimani, the Senate approved a mandatory measure on Iran, but Trump vetoed it. This time, it is a concurrent resolution, so it does not go to the president for signature.
The vote took place after a ceasefire was reached between the U.S. and Iran earlier this month. At that time, the Strait of Hormuz reopened, and oil prices fell from the peak levels triggered by the conflict. Stocks and oil had already priced in the relief from the ceasefire long before Tuesday's session. However, the White House called the decision meaningless, noting that concurrent resolutions have no legal force.
The S&P 500 index remained virtually unchanged, as did oil prices, following a sell-off in the technology sector that affected markets in the first half of the day. Meanwhile, oil prices edged slightly higher.
Bitcoin goes its own way
At the time of writing this review, Bitcoin is trading at $62,667 — the coin has lost approximately 2.5% over the past 24 hours. Its price dynamics recently reflect internal processes within the crypto market rather than political events in the U.S.
The beginning of June was marked by a record-breaking outflow of funds. Over 13 trading days, investors withdrew about $4.4 billion from U.S. spot Bitcoin exchange-traded funds. This capital outflow became the longest since the launch of these instruments in January 2024. The largest fund, BlackRock's IBIT, lost approximately $980 million during its worst week. The situation was further complicated by the U.S. Federal Reserve — the regulator is in no hurry to cut rates. Currently, Bitcoin is trading roughly half of its October high, when the price was around $126,000.
The current downturn challenges the thesis of Bitcoin as a safe-haven asset, often promoted by cryptocurrency enthusiasts. During U.S. strikes on Iran this year, Bitcoin fell along with stocks rather than rising alongside gold. As of today, the cryptocurrency's exchange rate is far more dependent on the level of global liquidity and interest rates than on geopolitical upheavals. Accordingly, a shift in investment flows into spot ETFs can impact quotes more strongly than any decisions made by the U.S. Congress.
My analysis shows that markets have already priced in all possible scenarios of the Iran-U.S. conflict. Bitcoin, having lost its correlation with geopolitics, is now entirely focused on macroeconomic factors and institutional capital flows. Until the Fed changes its course, BTC will remain in a sideways trend, regardless of Congress's decisions.