The resurgence of the Iran war premium has taken a toll on the cryptocurrency market. Over the past 24 hours, bitcoin plummeted 2.1% to $75,633, while ether dropped 3.4% to $2,244. This downturn is attributed to the significant 7.1% surge in Brent crude oil prices to $126.41 per barrel, the highest level in four years, following reports that President Trump is being briefed on potential military options against Iran.
The deployment of hypersonic missiles to the Middle East and the shutdown of the Strait of Hormuz have led to a war premium, causing prices to rise due to conflict risk rather than supply and demand. As a result, the global benchmark has seen a nine-day winning streak, with prices increasing over 100% year-to-date. Other cryptocurrencies, including XRP and Solana, also experienced declines, while dogecoin saw a 3.8% increase.
The surge in oil prices and a hawkish Fed have led to a decline in risk assets, with the dollar gaining and bonds sliding. Bitcoin's resilience is being tested, with the asset holding a tight band between $74,000 and $78,000 despite the escalating conflict. According to Fernando Lillo, director at exchange Zoomex, a break above $80,000 requires the war premium to unwind, which would necessitate a resolution to the Middle East conflict and a drop in Brent crude oil prices below $100 per barrel.