The resurgence of the Iran war premium has had a significant impact on the cryptocurrency market. Over the past 24 hours, bitcoin has fallen 2.1% to $75,633, with a weekly decline of 3%, as Brent crude oil prices jumped 7.1% to $126.41 per barrel, marking the highest intraday level in four years.
This surge in oil prices is attributed to an Axios report stating that President Donald Trump is set to receive a briefing on new military options against Iran. The report also mentioned that the US Central Command has requested the deployment of hypersonic missiles to the Middle East, which would be the first time American forces have used such weapons in combat. The Strait of Hormuz has been effectively shut down since the war began in late February, resulting in a significant reduction in crude, natural gas, and oil product flows.
This has led to a war premium, which refers to the portion of an asset's price driven by conflict risk rather than supply-demand fundamentals. Brent crude oil has been carrying a heavy war premium all year, with prices increasing by over 100% year-to-date. The global benchmark is currently on a nine-day winning streak, the longest since May 2022, and has risen by over 100% year-to-date.
Other cryptocurrencies, such as ether, XRP, and Solana, have also experienced declines, with ether dropping 3.4% to $2,244 and XRP falling 2.1% to $1.37. The only cryptocurrency in the top 10 to experience an increase is dogecoin, which has risen 3.8% on the day and 10.1% on the week to $0.10. Risk assets are experiencing a decline across the board, with Nasdaq 100 futures erasing an earlier 1.1% rally and MSCI's Asia Pacific share index falling 1.4%. The dollar has gained, and bonds have slid as the surge in oil and a hawkish Fed have reduced demand for fixed income.
Treasury 10-year yields have held near the highest since July, and Japan's 10-year notes have reached the highest level since 1997. Bitcoin's ability to withstand the early stages of the war is being tested, with the asset holding a tight band between $74,000 and $78,000 through April despite the increase in oil prices and the conflict entering its third month.
Each escalation headline has produced a sharper drawdown, and the cumulative damage is starting to show. Bitcoin is now $50,000 below its October 2025 all-time high of $126,000. Fernando Lillo, director at exchange Zoomex, stated that any break above $80,000 would require the war premium to unwind. He noted that bitcoin is attempting to break the key $80,000 level, which would necessitate a resolution to the Middle East conflict and a subsequent drop in Brent crude oil prices below $100 per barrel.
Lillo flagged a possible scenario where the Trump administration lifts the blockade in the coming days and frames it as a response to 'positive steps by Iran' to engineer a relief rally. A potential lifting of restrictions in the region and lower oil prices could trigger an accelerated influx of capital into risk assets, paving the way for Bitcoin to consolidate above $80,000 and move toward $85,000.