On Monday, the price of bitcoin plummeted to $79,074 during late Asian trading hours, marking a nearly $1,500 decline from its earlier high of $80,594, which was the highest level seen since January 31. This downturn was triggered by a report from Iran's Fars news agency, which alleged that two missiles had hit a US patrol boat near Jask Island after the vessel reportedly failed to heed Iranian warnings to leave its territorial waters.
As a result, Brent crude prices surged by over 5% to exceed $113 per barrel before paring back some of those gains. However, the US promptly 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 by a mere 0.2% for the day after starting Monday at $85.14. Meanwhile, XRP slipped to $1.40, and BNB declined to $623.
Dogecoin fared relatively better, with its price rising by 2.3% for the day to $0.1102, and its weekly print still standing at 12.1%. The escalation occurred just hours after President Donald Trump announced on Truth Social that the US would commence escorting stranded ships in the Persian Gulf through the Strait of Hormuz, starting Monday, as part of an operation dubbed Project Freedom. This operation involves the deployment of guided-missile destroyers, aircraft, and drones.
In response, Iran declared that it had 'redefined the control zone' in Hormuz, extending its claimed maritime borders to Fujairah and signaling its intention to regulate shipping traffic in the area, regardless of US operations. Earlier on Monday, bitcoin had broken through the $80,000 barrier for the first time since January, resulting in the liquidation of $301 million in shorts as the move unfolded.
The Senate's Clarity Act compromise on stablecoin yield, which was 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.