The resurgence of the Iran war premium has taken a toll on the cryptocurrency market. Over the past 24 hours, bitcoin has fallen by 2.1% to $75,633, marking a 3% decline over the week. This downturn coincides with a 7.1% surge in Brent crude prices to $126.41 per barrel, the highest level in four years, following reports that President Trump is being briefed on potential military options against Iran. The deployment of hypersonic missiles to the Middle East, as requested by U.S.
Central Command, would be a first for American forces in combat, further exacerbating the situation. As a result, the Strait of Hormuz has been effectively shut down since late February, severely impacting crude, natural gas, and oil product flows.
The war premium, which refers to the portion of an asset's price driven by conflict risk rather than fundamental supply and demand, has been a significant factor in Brent prices, with the global benchmark experiencing a nine-day winning streak and a year-to-date increase of over 100%. Other cryptocurrencies, including ether, XRP, and Solana, have also seen declines, with ether dropping 3.4% to $2,244 and XRP falling 2.1% to $1.37. In contrast, 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, while bonds have slid, and Treasury 10-year yields have held near their highest level since July. Bitcoin's ability to withstand the early stages of the war is being tested, with the asset having held a tight band between $74,000 and $78,000 despite the escalating conflict. However, the cumulative damage is starting to show, with bitcoin now $50,000 below its October 2025 all-time high of $126,000.
According to Fernando Lillo, director at exchange Zoomex, any break above $80,000 would require the war premium to unwind, which would necessitate a resolution to the Middle East conflict and a drop in Brent crude oil prices below $100 per barrel. Lillo suggests that a possible scenario where the Trump administration lifts the blockade in the coming days, framing it as a response to 'positive steps by Iran,' could trigger a relief rally, paving the way for Bitcoin to consolidate above $80,000 and move toward $85,000.