The resurgence of the Iran war premium has taken a toll on the cryptocurrency market. Over the past 24 hours, bitcoin has slipped 2.1% to $75,633, while ether has fallen 3.4% to $2,244.
This decline is attributed to the surge in Brent crude oil prices, which have jumped 7.1% to $126.41 a barrel, the highest level in four years. The increase in oil prices is a result of reports that President Donald Trump is being briefed on new military options against Iran, which has led to a war premium being factored into the price of assets. The Strait of Hormuz has been effectively shut down since the war began, disrupting the flow of crude, natural gas, and oil products.
As a result, the global benchmark for oil has been on a nine-day winning streak, with prices increasing by over 100% year-to-date. Other cryptocurrencies, such as XRP and Solana, have also seen declines, while dogecoin has experienced a 3.8% increase.
The rise in oil prices has also had an impact on other risk assets, with the Nasdaq 100 futures and European equities experiencing declines. The dollar has gained, and bonds have slid, as the surge in oil and a hawkish Fed have reduced demand for fixed income.
Bitcoin's ability to withstand the early stages of the war is being tested, with the asset having held a tight band between $74,000 and $78,000 through April. However, each escalation headline has produced a sharper drawdown, and the cumulative damage is starting to show. According to Fernando Lillo, director at exchange Zoomex, any break above $80,000 will require 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.