The resurgence of the Iran war premium has negatively impacted the crypto market. Over the past 24 hours, bitcoin has fallen 2.1% to $75,633, representing a 3% weekly decline, while Brent crude oil prices have jumped 7.1% to $126.41 per barrel, a four-year high, following an Axios report that President Trump will 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 combat use of such weapons by American forces. The Strait of Hormuz has been effectively closed since late February, disrupting the flow of crude oil, natural gas, and oil products, resulting in a war premium that drives asset prices due to conflict risk rather than supply and demand fundamentals.
Brent crude has experienced a significant war premium all year, with prices increasing over 100% year-to-date. The global benchmark has seen a nine-day winning streak, the longest since May 2022, and is up over 100% year-to-date. Other cryptocurrencies, such as ether, XRP, and Solana, have also declined, with ether dropping 3.4% to $2,244, XRP falling 2.1% to $1.37, and Solana losing 2.6% to $82.62. The only top 10 cryptocurrency to experience gains outside of stablecoins is dogecoin, which has risen 3.8% to $0.10.
Risk assets have declined across the board, with Nasdaq 100 futures erasing earlier gains and European equities poised to drop 1% at the open. The US dollar has gained, while bonds have slid due to the surge in oil prices and a hawkish Fed stance, which has reduced demand for fixed income. Bitcoin's ability to withstand the early stages of the war is being tested, having held a tight range between $74,000 and $78,000 in April despite rising oil prices and the conflict entering its third month. However, each escalation headline has resulted in sharper drawdowns, and the cumulative damage is beginning to show, with bitcoin now $50,000 below its October 2025 all-time high of $126,000.
According to Fernando Lillo, director at exchange Zoomex, a break above $80,000 would require the war premium to unwind. Lillo stated 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. He also flagged a possible scenario where the Trump administration lifts the blockade in the coming days, framing it as a response to 'positive steps by Iran,' which could trigger a relief rally and an influx of capital into risk assets, potentially paving the way for bitcoin to consolidate above $80,000 and move toward $85,000.