The resurgence of the Iran war premium has negatively impacted the cryptocurrency market. Over the past 24 hours, bitcoin has declined by 2.1% to $75,633, while ether has dropped by 3.4%.
This downturn is attributed to the significant increase in Brent crude oil prices, which have risen by 7.1% to $126.41 per barrel, the highest level in four years. The oil price surge is a result of reports that US President Donald Trump is being briefed on potential military options against Iran. The deployment of hypersonic missiles to the Middle East is also being considered, which would mark the first time such weapons have been used in combat by American forces. The Strait of Hormuz has been effectively shut down since the conflict began, severely impacting the flow of crude oil, natural gas, and other oil products.
This has led to a war premium, where the price of an asset is driven by conflict risk rather than supply and demand fundamentals. As a result, Brent crude oil prices have increased by over 100% year-to-date. The global benchmark is currently on a nine-day winning streak, the longest since May 2022.
Other cryptocurrencies, including XRP and Solana, have also seen significant declines. In contrast, dogecoin has seen a 3.8% increase in value over the past 24 hours. The downturn in the cryptocurrency market is also being felt in other risk assets, with the Nasdaq 100 futures and European equities experiencing declines. The US dollar has gained value, while bonds have slid due to the surge in oil prices and a hawkish Federal Reserve.
The 10-year Treasury yields have held near their highest level since July, while Japan's 10-year notes have reached their highest level since 1997. Bitcoin's ability to withstand the early stages of the conflict is being tested, with the asset holding a tight band between $74,000 and $78,000 despite the significant increase in oil prices. However, each escalation headline has produced a sharper drawdown, and the cumulative damage is starting to show.
Bitcoin is currently $50,000 below its all-time high of $126,000, reached in October 2025. According to Fernando Lillo, director at exchange Zoomex, a break above $80,000 will require the war premium to unwind. Lillo believes 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 break the key $80,000 level.
He also suggests that the Trump administration may lift the naval blockade of Iran in the coming days, framing it as a response to positive steps taken by Iran, which could trigger a relief rally and pave the way for bitcoin to consolidate above $80,000 and move towards $85,000.