Bitcoin Grinds Up Amidst Venezuela Conflict

Bitcoin edged higher on Monday as Venezuela’s political and geopolitical turbulence intensified. U.S. President Donald Trump announced the U.S. would assume control of Venezuela until a new transition is established, raising uncertainty over the country’s short-term governance. María Corina Machado, a Bitcoin advocate and opposition leader, is positioned as a key contender to lead the country following the removal of President Nicolás Maduro according to reports.

Machado, who won the Nobel Peace Prize in 2025, has a 28% chance of becoming Venezuela’s leader by the end of 2026, according to the prediction market Kalshi. The current odds favor Machado’s rival, Edmundo González Urrutia, who has a 32% chance of taking over according to reports.

Vice President Delcy Rodríguez, Maduro’s former running mate, was appointed acting president by Venezuela’s Supreme Court after Maduro was captured and transferred to New York to face federal charges. However, Trump has suggested he views Rodríguez as insufficiently respected among Venezuelans to lead effectively according to Trump.

Why Did This Happen?

The capture of Maduro, who has ruled Venezuela since 2013, has triggered a transition of power and raised the possibility of a shift toward free-market reforms. Machado has long advocated for Bitcoin as a tool to counter the hyperinflation that has decimated the bolivar. She previously stated that Bitcoin evolved from a humanitarian tool to a vital means of resistance for Venezuelans according to reports.

Trump’s involvement has added an additional layer of uncertainty. The U.S. is not currently demanding specific policy changes from the acting leadership, but it has communicated with Rodríguez and appears to be positioning itself to direct the transition according to reports.

How Did Markets React?

The cryptocurrency market remained relatively stable in the wake of the U.S. military operation in Caracas, with Bitcoin trading near $92,000. BlockByte, a digital assets brokerage, suggested that the removal of Maduro could boost crypto markets in 2026 by reducing global oil prices and encouraging capital inflows into digital assets according to BlockByte.

Gold prices also responded to the geopolitical uncertainty, surging nearly 2% on the news. However, gold’s annual gains of 63% suggest that its rally may already be largely priced in according to market analysis.

U.S. spot Bitcoin and Ethereum ETFs saw robust inflows on January 2, with a total of $670 million entering the sector. Bitcoin ETFs alone attracted $471 million, led by BlackRock’s iShares Bitcoin Trust according to financial reports.

What Are Analysts Watching Next?

Analysts are closely monitoring how the political transition in Venezuela unfolds and whether Machado will be able to implement the pro-Bitcoin policies she has long championed. If Venezuela were to adopt Bitcoin as an official reserve asset or payment solution, it could further support Bitcoin’s price in the short term according to analysts.

Market watchers are also tracking the potential sell-off of Venezuela’s reported $60 billion in Bitcoin holdings, which the U.S. Department of Justice may auction through platforms like Coinbase Prime. This could create a significant supply shock, potentially driving volatility in Q1 2026 according to reports.

On the broader market front, the Crypto Fear and Greed Index turned neutral for the first time in months, signaling improved risk appetite. Meme coins, including PEPE and BONK, saw strong gains as investor sentiment turned optimistic according to market data.

Meanwhile, Ethereum ETFs attracted $174 million in inflows, with Grayscale’s Ethereum Trust leading the sector. The broader altcoin market also saw activity, with inflows into Solana, XRP, and Dogecoin ETFs according to reports.

BlackRock, which manages the largest Bitcoin ETF by assets under management, moved $214 million in Bitcoin and Ethereum to Coinbase Prime in late December to address ETF outflows. This liquidity adjustment followed outflows from its Bitcoin and Ethereum ETFs as investors engaged in year-end tax strategies according to financial reports.

Venezuela’s political shift, coupled with broader market optimism and ETF inflows, has created a complex environment for investors. While Bitcoin remains near its $92,000 level, the coming months will reveal whether the geopolitical developments and institutional strategies will drive a sustained bull market or trigger volatility.