US President Donald Trump announced the “closure” of Venezuelan airspace on Saturday, sharply escalating tensions between Washington and Caracas.
Trump declined to elaborate on the details, but his statement comes after weeks of continued military buildup in the Caribbean and brought the “imminent risk of war” in the region back on the agenda.
The Venezuelan government described the US actions as a “colonialist threat to Latin America,” while President Nicolas Maduro claimed the US was “trying to fabricate a justification to pave the way for military intervention.” Caracas has been conducting regular military exercises in recent weeks and has called for “massive mobilization” in response to a potential attack.
The Trump administration has been sending a large naval force to the Southern Caribbean since early September. The United States claims these operations are “anti-drug trafficking,” but no evidence has been released to suggest the targeted vessels are drug-related. At least 83 people have been killed in the attack so far.
Last week, the U.S. government further increased pressure on the Cartel de los Soles, which has long been associated with Venezuela’s security services, by designating it a “foreign terrorist organization.” Critics claim these measures are part of an illegal process to overthrow Maduro’s government.
From the beginning of his second term, President Trump declared Maduro a “world leader of terrorism,” imposed a 25% tariff on countries purchasing Venezuelan oil, and increased the bounty for Maduro’s capture to $50 million.
In recent weeks, the United States has deployed the aircraft carrier Gerald R. Ford, other warships, thousands of soldiers and F-35 fighter jets to the region. In recent remarks, President Trump said a ground attack on the country was “imminent.”
According to reports in the New York Times and Wall Street Journal, President Trump spoke by phone with President Maduro last week. “I might talk to him. Maybe. We’re talking,” Trump told reporters on Air Force One.
Asked by reporters why he wanted to meet with President Maduro, whom the United States has designated as a “leader of a terrorist organization,” President Trump replied:
“I’ll take the easy way out if I can save a life, but I’ll take the hard way if necessary.”
The Trump administration’s deadly airstrikes and naval strikes in the Caribbean have drawn harsh criticism for violating both the U.S. Constitution and international law. According to the Washington Post, Secretary of Defense Pete Hegseth ordered the military to “kill all passengers on boats suspected of transporting drugs.” Although Mr Hegseth denied the allegations, calling them “fake news”, parliament launched a formal investigation into the incident.
The impact of tensions between the US and Venezuela on global markets could be particularly significant for Bitcoin. When geopolitical risks increase, investors typically turn to safe-haven assets, and in recent years Bitcoin has even taken on the role of a geopolitical hedge similar to gold.
The Fed is expected to cut interest rates in December, but that could change if war breaks out along the Washington-Caracas line.
In a scenario where tensions escalate due to limited operations rather than all-out war, Bitcoin could initially experience volatility due to global risk-off behavior. U.S. airstrikes and missile strikes against limited targets inside Venezuela could temporarily raise oil prices and cause market instability, but may not cause widespread geopolitical turmoil. In such a scenario, BTC volatility could remain limited unless the Fed shelves interest rate cuts.
In a scenario where the United States begins to deploy ground forces inside Venezuela beyond a limited operation, leading to a broader military operation, global markets could enter a sharp risk-off period. If oil prices rise above $100, it could disrupt inflation expectations and force the Fed to cancel its December rate cut. As economic uncertainty increases, Bitcoin may generally price in the initial shock negatively.
*This is not investment advice.
