The resurgence of the Iran war premium has had a significant impact on the cryptocurrency market. Over the past 24 hours, bitcoin has declined by 2.1% to $75,633, while ether has dropped by 3.4% to $2,244.
This downturn is attributed to the recent increase in Brent crude oil prices, which have reached a four-year high of $126.41 per barrel. The rise in oil prices is a result of reports that President Donald Trump is being briefed on potential military options against Iran, leading to a war premium being factored into the price of oil.
This premium refers to the portion of an asset's price driven by conflict risk rather than supply and demand fundamentals. As a result, the price of bitcoin has been affected, with the asset struggling to break above the $80,000 level. According to Fernando Lillo, director at exchange Zoomex, a break above $80,000 would require the war premium to unwind and a resolution to the Middle East conflict. Lillo suggests that a possible scenario where the Trump administration lifts the blockade in the coming days could lead to a relief rally, triggering an influx of capital into risk assets and potentially paving the way for bitcoin to consolidate above $80,000.