The resurgence of the Iran war premium has taken a toll on the cryptocurrency market. Over the past 24 hours, bitcoin has declined by 2.1% to $75,633, representing a 3% loss for the week, as Brent crude oil prices jumped 7.1% to $126.41 per barrel, reaching a four-year high. This surge in oil prices was triggered by an Axios report stating that President Donald Trump is scheduled to receive a briefing on new military options against Iran. The report also mentioned that US Central Command has requested the deployment of hypersonic missiles to the Middle East, which would be the first time American forces have used such weapons in combat.
The Strait of Hormuz has been effectively shut down since the war began in late February, severely impacting the flow of crude oil, natural gas, and oil products. This development has led to a war premium, which is the portion of an asset's price driven by conflict risk rather than supply-demand fundamentals. Brent crude oil has been carrying a heavy war premium all year, with prices increasing by over 100% year-to-date. The global benchmark is currently on a nine-day winning streak, the longest since May 2022, and has risen by over 100% year-to-date.
Other cryptocurrencies, such as ether, XRP, and Solana, have also experienced declines, with ether dropping 3.4% to $2,244 and XRP falling 2.1% to $1.37. The only cryptocurrency in the top 10 to experience gains is dogecoin, which increased by 3.8% on the day and 10.1% on the week to $0.10. Risk assets across the board are experiencing losses, with the Nasdaq 100 futures erasing an earlier 1.1% rally and the MSCI's Asia Pacific share index falling 1.4%.
The surge in oil prices and a hawkish Fed have led to a decrease in demand for fixed income, causing the dollar to gain and bonds to slide. Treasury 10-year yields are near their highest level since July, and Japan's 10-year notes have reached their highest level since 1997.
Bitcoin's ability to withstand the early stages of the war is being tested, as the asset has held a tight band between $74,000 and $78,000 throughout April despite the conflict entering its third month. Each escalation headline has produced a sharper drawdown, and the cumulative damage is beginning to show. Bitcoin is currently $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 requires the war premium to unwind.
Lillo stated that bitcoin is trying to break the key $80,000 level, which would require a resolution to the Middle East conflict and a subsequent drop in Brent crude oil prices below $100 per barrel. He also flagged a possible scenario where the Trump administration lifts the blockade in the coming days and frames it as a response to 'positive steps by Iran' to engineer a relief rally. A potential lifting of restrictions in the region and lower oil prices could trigger an accelerated influx of capital into risk assets, paving the way for bitcoin to consolidate above $80,000 and move toward $85,000.