The resurgence of the Iran war premium has taken a toll on the cryptocurrency market. Over the past 24 hours, bitcoin has fallen 2.1% to $75,633, marking a 3% decline over the week, as Brent crude oil prices skyrocketed 7.1% to $126.41 per barrel - a four-year high - following reports that President Trump is being briefed on potential military actions against Iran. This development has led to the deployment of hypersonic missiles to the Middle East, a first for American forces, and has effectively shut down the Strait of Hormuz, disrupting crude, natural gas, and oil product flows.
As a result, a war premium has been factored into the price of assets, driven by conflict risk rather than supply and demand fundamentals. The global benchmark has seen a nine-day winning streak, its longest since May 2022, with prices increasing over 100% year-to-date. Ether has dropped 3.4% to $2,244, while XRP and Solana have fallen 2.1% and 2.6% respectively.
The only notable exception is dogecoin, which has risen 3.8% on the day and 10.1% over the week. Risk assets across the board are experiencing losses, with the Nasdaq 100 futures erasing earlier gains, the MSCI Asia Pacific share index falling 1.4%, and European equities poised to drop 1% at the open. The dollar has gained, while bonds have slid due to the surge in oil prices and a hawkish Fed stance. Bitcoin's ability to withstand the early stages of the war is being tested, having held a tight band between $74,000 and $78,000 throughout April despite rising oil prices and the conflict entering its third month.
Fernando Lillo, director at Zoomex, notes that any break above $80,000 would require the war premium to unwind, adding that a resolution to the Middle East conflict and a subsequent drop in Brent crude oil prices below $100 per barrel are necessary for bitcoin to reach this level.