On Monday, bitcoin's price plummeted to $79,074 during late Asian trading hours, marking a nearly $1,500 decline from its intraday high of $80,594, which was the highest level reached since January 31. This downturn was triggered by a report from Iran's Fars news agency, which alleged that two missiles had struck a US patrol boat near Jask Island after the vessel supposedly disregarded Iranian warnings to leave its territorial waters. As a result, Brent crude prices surged over 5% to trade above $113 per barrel before partially retracing the gain. The US subsequently denied the report, stating that no American ship had been struck.
Although oil and equity futures pared their initial moves following the denial, bitcoin's decline persisted as traders factored in the fragility of the ceasefire that has been in place since early April. Other major cryptocurrencies followed bitcoin's downward trend from their intraday highs but remained positive for the day.
Ether was trading at $2,341, representing a 1.2% increase over the past 24 hours after reaching $2,368 earlier. Solana was priced at $84.08, up just 0.2% for the day after starting Monday at $85.14.
XRP slipped to $1.40, while BNB declined to $623. Dogecoin, however, managed to hold its gains better than most, rising 2.3% for the day to $0.1102, with its weekly print still at 12.1%. The escalation occurred hours after President Donald Trump announced on Truth Social that the US would commence escorting ships stranded in the Persian Gulf through the Strait of Hormuz, starting Monday, as part of an operation dubbed Project Freedom. This operation involves guided-missile destroyers, aircraft, and drones.
In response, Iran announced that it had 'redefined the control zone' in Hormuz, extending its claimed maritime borders to Fujairah and signaling that Tehran would regulate shipping traffic in the area regardless of US operations. Bitcoin had broken the $80,000 threshold for the first time since January, with $301 million in shorts liquidated as the move unfolded earlier on Monday. The Senate's Clarity Act compromise on stablecoin yield, released on Friday, had contributed to the risk-on tone heading into the week. The validity of the US denial or the emergence of fresh confirmations from either side is likely to set the tone for the remainder of the US session.