TLDR:

• Pakistan delivered Washington’s 15-point peace plan to Iran on the same day Chinese warships docked in Karachi.
  
• Gwadar Port, operated by China under a 40-year lease, sits 400 km from Hormuz and bypasses the blocked strait entirely.
  
• Hormuz traffic has collapsed over 90 percent, with Iran collecting yuan tolls and drafting laws to make them permanent.
  
• Pakistan owes China over $30 billion and sources 81 percent of its arms from Beijing while holding U.S. ally status.

Pakistan finds itself at the center of a growing geopolitical puzzle as the Strait of Hormuz crisis deepens. The country is actively mediating between the United States and Iran while simultaneously hosting China’s most strategic maritime bypass.

Analysts are now watching Islamabad closely. Pakistan holds Major Non-NATO Ally status with Washington, owes Beijing over $30 billion, and operates a port that becomes more valuable the longer Hormuz stays closed.

Pakistan’s Dual Role in the Hormuz Standoff

Traffic through the Strait of Hormuz has collapsed by over 90 percent. Iran is currently collecting yuan-denominated tolls from Chinese-linked vessels passing through the strait. Bloomberg reports that Iran’s parliament is drafting legislation to make these tolls permanent.

On March 25, Pakistan delivered a 15-point American peace plan to Tehran. Special Envoy Steve Witkoff confirmed this at a Cabinet meeting, describing the mediation channel as “strong and positive.” Prime Minister Shehbaz Sharif has also offered to host direct face-to-face talks between the parties.

On the very same day, PLA Navy Ship Daqing docked in Karachi. The vessel is participating in Sea Guardian IV, joint naval drills with Pakistan running through April 2. These exercises are taking place in the Arabian Sea, the same waters where Gwadar Port operates.

Analyst Shanaka Anslem Perera noted the timing on social media: “Pakistan is the only country on earth that profits from both outcomes of this war.” This observation has since circulated widely among geopolitical observers.

Pakistan receives 81 percent of its arms from China, according to SIPRI data. That dependency, combined with its American alliance and active mediation role, places Islamabad in a structurally unique position during this crisis.

Gwadar Port and the CPEC Bypass Corridor

Gwadar Port sits approximately 400 kilometers from the Strait of Hormuz on the Balochistan coast. China Overseas Port Holding Company operates it under a 40-year lease. It serves as the southwestern terminal of the $62 billion China-Pakistan Economic Corridor.

CPEC connects the Arabian Sea directly to China’s Xinjiang region through 3,000 kilometers of roads, railways, and pipelines.

According to CPEC planning documents, this route cuts China’s Middle Eastern energy import distance from 12,000 kilometers by sea to roughly 2,500 kilometers overland.

Every barrel of oil that cannot pass through Hormuz strengthens the economic argument for routing energy through CPEC instead. A permanent Iranian toll regime at the strait would further accelerate Chinese investment in this overland alternative.

Iran’s fifth ceasefire condition currently demands permanent sovereignty over the Strait of Hormuz. If any version of that condition is accepted, the yuan toll system could gain international legitimacy. China stands to benefit most from that outcome.

The Sea Guardian drills conclude on April 2. The Trump administration’s diplomatic deadline falls on April 6. That four-day gap separates the end of Chinese military exercises in Pakistan’s waters from a moment when the largest American military buildup since 2003 either acts or withdraws. Pakistan’s position between these two timelines is not coincidental.

Bitcoin (BTC) extended its decline on Friday as traders reacted to the year’s largest options expiry and continued caution in crypto ETF flows. 

Consequently, the drop pushed the asset to its lowest level in more than three weeks, even as some market signals pointed to rising accumulation and possible oversold conditions.

Bitcoin fell to as low as $65,500 on Friday, its weakest level since March 2. At the time of writing, BTC traded near $66,300, down 2% over 24 hours and 6% over the past week (per CoinGecko’s data).

Meanwhile, the move came as roughly $14 billion in Bitcoin options expired, based on open interest. That expiry added pressure to an already cautious market and pushed traders toward a more defensive stance during the session.

ETF activity also remained in focus as investors continued pulling funds from spot Bitcoin products. Data showed that investors withdrew $171 million from spot ETFs on Thursday, adding to short-term pressure on price action.

Still, the broader monthly picture looked more balanced. March recorded about $1.4 billion in net inflows into Bitcoin ETFs after four straight months of net outflows, showing that demand had not fully disappeared despite the latest setback.

While price remained under pressure, on-chain data pointed to continued buying from large holders and smaller wallets. According to Santiment, wallets holding between 10 and 10,000 BTC added 61,568 BTC over the past month, a 0.45% increase.

Smaller holders also showed similar behavior. Wallets with less than 0.01 BTC increased their balances by 0.42% over the same period, nearly matching the pace seen among whales and sharks.

Analysts watch for oversold bounce

Market watchers also pointed to oversold signals as Bitcoin traded well below its October 2025 all-time high above $126,000. Current pricing left BTC down 47.42% from that peak, while its market capitalization stood near $1.33 trillion.

Crypto analyst XO said March could mark only the second time Bitcoin posts six straight losing months if the month closes in the red. He wrote, 

“If April sees an early sweep into the $55–60K range, it could create a compelling setup for mean-reversion longs.” 

He also said that the higher timeframe trend would stay in control unless a clear structural shift appears.

Senator Elizabeth Warren has reportedly asked the US Commerce Department to explain how it is handling potential national security risks tied to Chinese crypto mining giant Bitmain, following previous reports that the firm has been under federal scrutiny.

In a letter sent Thursday to Commerce Secretary Howard Lutnick, Warren requested documents and communications related to Bitmain, which manufactures a large share of the world’s Bitcoin mining equipment, Bloomberg reported on Friday.

In November last year, it was reported that US authorities had launched an investigation into Bitmain over potential national security risks. The probe, known as “Operation Red Sunset” and led by the US Department of Homeland Security, aimed to examine whether Bitmain’s ASIC machines could be remotely accessed for espionage or used to disrupt the US power grid.

According to Bloomberg, the probe remains unresolved, and its current status is unclear. National security investigations of this type can run for years without public disclosure or legal action.

Related: MARA sells $1.1B in Bitcoin to buy back debt at 9% discount

US scrutiny of Bitmain deepens

The scrutiny follows earlier actions, including halted shipments of Bitmain devices and a separate investigation into a related Chinese chip firm over alleged links to sanctioned Huawei.

In 2024, a federal review also flagged the use of its machines near a US military base as raising “significant national security concerns.”

In July last year, Bloomberg also reported that Bitmain is preparing to open its first US-based ASIC manufacturing facility, with chip production expected to begin in early 2026 and scale by year-end.

Cointelegraph reached out to Warren and Bitmain for comment, but had not received a response by publication.

Related: Bitcoin mining difficulty falls 7.7% as miner pressure persists

Trump-backed American Bitcoin buys Bitmain mining rigs

Bitmain’s machines are widely used in Bitcoin mining operations, including by American Bitcoin Corp., which counts Eric Trump and Donald Trump Jr. among its investors. The firm agreed last year to acquire 16,000 Bitmain rigs in a $314 million deal.

Warren’s letter also seeks details on any communications between Bitmain, the Trump family and Commerce officials, and asks what steps the department has taken to shield national security decisions from political influence.

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