Bitcoin slid to $66,702 in early trading on Monday, down 1.1 percent in the past 24 hours, as traditional markets opened and began to factor in the conflict between the U.S. and Iran, while the cryptocurrency has traded in isolation since Saturday, coindesk.com wrote.
Sunday’s rebound to $68,000 on the back of Khamenei’s confirmation was largely leveled off and the market returned to the mid-$66,000 range that preceded the strikes.
The overall picture in the cryptocurrency market looked mixed. Etherium fell 2.5% to $1,967, Solana dropped 4.1% to $84, and XRP lost 3.6% to $1.36. The real losses reflected the weekly figures, with Solana falling 8.1% in seven days, topping the lists of losses among the top cryptocurrencies.
Traditional markets told the story the crypto market expected. Brent crude rose as much as 13% in opening trading before stabilizing around $77.50, up 6.4%, the biggest jump since Russia invaded Ukraine in 2022.
Geographic factor
The Strait of Hormuz, through which about a fifth of the world’s oil passes, is effectively closed, according to data compiled by Bloomberg. Asian stocks fell 1.4 percent and U.S. stock futures were down 0.7 percent. Gold rose to $5,350 an ounce.
The movement of oil is crucial to the short-term direction of cryptocurrencies. Rising energy prices have a direct impact on inflation expectations, which pushes back the timing of Fed rate cuts and tightens liquidity conditions affecting risk asset prices.
Meanwhile, some crypto traders believe that further downside risks in the market may be limited.
“Given that Iran has long been isolated from global financial markets, we believe downside risk is limited,” said Jeff May, chief operating officer at BTSE.
“Some have expressed concern about oil prices and their potential impact on inflation, but the world has already given up on Iranian oil and increased supply from OPEC and the US should be sufficient to stabilize prices,” he elaborated.
Whether this is true will become known depending on whether the Strait of Hormuz opens and how long it takes to achieve Trump’s “goals.” While these two questions remain unanswered, cryptocurrencies are trading as a risky asset in a world that has become even riskier.
