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, with a weekly decline of 3%, as Brent crude reached a four-year high of $126.41 per barrel following reports that President Trump will receive a briefing on potential military action against Iran.
This development has led to a war premium, where asset prices are influenced by conflict risk rather than fundamental supply and demand. As a result, Brent crude has seen a significant increase of over 100% year-to-date, with a nine-day winning streak, the longest since May 2022.
Other cryptocurrencies such as ether, XRP, and Solana have also experienced declines, while dogecoin has seen a 3.8% increase. The surge in oil prices and a hawkish Fed have led to a decline in risk assets, with the Nasdaq 100 futures and European equities experiencing losses.
The dollar has gained, and bonds have slid, with Treasury 10-year yields near their highest level since July. Bitcoin's ability to withstand the early stages of the war is being tested, with the asset struggling to break the $80,000 level. According to Fernando Lillo, director at Zoomex, any break above $80,000 would require a resolution to the Middle East conflict and a subsequent drop in Brent crude oil prices below $100 per barrel.