US–Venezuela Standoff Threatens Fed Rate Cut Plans, Squeezes Crypto Liquidity

Venezuela and the US are in a naval standoff, as President Trump sent a small fleet near the country. The direct risk to crypto seems low, but conflict could impact US fiscal policy, market liquidity, and commodities prices.

Bitunix, a decentralized exchange, exclusively shared some data and analysis with BeInCrypto.

US-Venezuela Cold War In Motion?

There’s a new geopolitical crisis stirring off the coast of South America. The US Navy is currently conducting aggressive exercises near Venezuela, sending destroyers, drones, submarines, and missile cruisers into the nation’s waters.

In response, the country is fortifying its borders and ports, arming millions of citizens to form a defensive militia.

The US is ostensibly alleging that Venezuela’s government is directly complicit in the cocaine trade, but there’s not a ton of evidence for this. President Trump used a similar pretext in his tariff negotiations with Mexico.

The move is now putting the massive oil exporter in a delicate position:

“This move heightens crude oil supply risks and inflation expectations, adding new uncertainty ahead of the September Fed meeting. While most analysts see the probability of outright conflict as low, oil market risk premiums could remain volatile,” Bitunix claimed in an exclusive statement shared with BeInCrypto.

Crypto Impact: Policy, Liquidity, Commodities

So, what does all this have to do with crypto? Venezuela’s inimical relationship with the US has actually given it many opportunities to embrace Web3. It launched Petro, the world’s first CBDC (now defunct), and uses Tether to evade sanctions. Venezuela is a growing crypto market, and its government has explored blockchain many times.

Realistically, though, the nation’s interest in crypto will make a tiny splash compared to its oil exports. How important are they?

So far, Bitunix reported minor changes in asset prices: Bitcoin has shown resistance at $114,000-$116,000, support near $110,000, and open interest down in BTC, but rising in ETH.

In other words, there hasn’t been a big impact yet, but there are signals of capital rotation and tightening liquidity. These last two points might become the main levers for the conflict to blow back on crypto.

If the US manages to disrupt Venezuela’s ability to produce or export petroleum, it could turn commodity markets jittery.

Mostly, the effects would be upstream from Web3; Bitunix doesn’t believe that energy prices will directly impact crypto markets, but this situation might affect Jerome Powell’s tentative rate cut plans:

“A sustained rise in crude would temper rate cut expectations and pressure risk assets; if the standoff remains at a military exercise level, markets may digest it quickly. In crypto, short-term safe-haven demand provides some support, but investors should remain alert to cross-asset volatility triggered by a sharp oil spike,” Bitunix claimed.

The main question is how far President Trump will wish to push the US against Venezuela. On one hand, a full-fledged invasion seems unlikely, especially if Maduro’s claim that he mobilized 4.5 million militia members is accurate.

On the other hand, though, legal experts worry that Trump could approve an indefinite bombing campaign, which would impact oil prices.

Overall, investors should treat this brewing cold war like any other macroeconomic development. Oil affects the entire world economy, and the US is particularly sensitive.

Crypto investments won’t be directly in the firing line, but US fiscal policy and global commodities markets could nudge token prices.