The resurgence of the Iran war premium has taken a toll on the crypto market. Over the past 24 hours, bitcoin has slipped 2.1% to $75,633, marking a 3% decline over the week. This downturn coincides with a significant 7.1% jump in Brent crude oil prices to $126.41 per barrel, the highest intraday level in four years, sparked by reports that President Donald Trump is set to receive a briefing on potential military options against Iran.
The report also indicated 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 shut down since the war began in late February, severely impacting 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 fundamental supply and demand.
Brent crude has been carrying a substantial war premium all year, with prices skyrocketing over 100% year-to-date. The global benchmark is currently on a nine-day winning streak, its longest since May 2022, and has surged 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, XRP falling 2.1% to $1.37, and Solana losing 2.6% to $82.62.
The only notable exception among the top 10 cryptocurrencies, excluding stablecoins, is dogecoin, which has risen 3.8% on the day and 10.1% over the week to $0.10. The downturn in risk assets is a widespread phenomenon, with Nasdaq 100 futures relinquishing earlier gains, MSCI's Asia Pacific share index falling 1.4%, and European equities poised to drop 1% at the open.
The dollar has gained strength, while bonds have slid, as the surge in oil prices and a hawkish Fed have reduced demand for fixed income. Treasury 10-year yields are hovering near their highest levels since July, and Japan's 10-year notes have reached their highest level since 1997, according to Bloomberg. Bitcoin's ability to withstand the early stages of the war is being put to the test. Despite holding a tight band between $74,000 and $78,000 throughout April, even as oil prices soared from $98 to $126 and the conflict entered its third month, the asset is now $50,000 below its October 2025 all-time high of $126,000.
Fernando Lillo, director at exchange Zoomex, noted that any break above $80,000 would require the war premium to unwind. "Bitcoin is attempting to break the crucial $80,000 level, which would necessitate a resolution to the Middle East conflict and, consequently, a drop in Brent crude oil prices below $100 per barrel," he stated. "One is impossible without the other, and the USA administration's plans for a prolonged naval blockade of Iran are becoming a significant obstacle." Lillo suggested 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.
"A potential lifting of restrictions in the region and lower oil prices could trigger an accelerated influx of capital into risk assets, paving the way for Bitcoin to consolidate above $80,000 and move toward $85,000."