The resurgence of the Iran war premium has taken a toll on the crypto market. Over the past 24 hours, bitcoin has slid 2.1% to $75,633, marking a 3% decline for the week, as Brent crude oil prices jumped 7.1% to $126.41 per barrel, reaching a four-year high, following an Axios report that President Donald Trump is set to receive a briefing on new military options against Iran.
The report also stated that U.S. 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, severely limiting the flow of crude oil, natural gas, and oil products.
This development 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 significant 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.
In contrast, dogecoin has seen a 3.8% increase in value. Risk assets across the board are experiencing a decline, with Nasdaq 100 futures erasing earlier gains and European equities poised to drop 1% at the open.
The surge in oil prices and a hawkish Fed have led to a decrease in demand for fixed income, resulting in the dollar gaining value and bonds sliding. 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 throughout April, despite oil prices rising from $98 to $126. However, 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. According to Fernando Lillo, director at exchange Zoomex, any break above $80,000 would require the war premium to unwind. Lillo stated that bitcoin is trying 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 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 influx of capital into risk assets, paving the way for bitcoin to consolidate above $80,000 and move toward $85,000.