The price of bitcoin dropped to $79,074 during late Asian trading hours on Monday, marking a reversal of nearly $1,500 from its intraday high of $80,594, the highest level since January 31. This downturn was triggered by a report from Iran's Fars news agency, which claimed that two missiles had struck a U.S. patrol boat near Jask Island after the vessel allegedly disregarded Iranian warnings to leave its territorial waters. As a result, Brent crude prices surged over 5% to above $113 per barrel before partially retracing the gain.

However, the U.S. subsequently denied the report, stating that no American ship had been hit. Although oil and equity futures pared their initial moves following the denial, bitcoin maintained its decline as traders factored in the fragility of the ceasefire that has been in place since early April.

Other major cryptocurrencies also declined 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 at $84.08, up 0.2% for the day, while XRP and BNB declined to $1.40 and $623, respectively. Dogecoin held its gains relatively better, rising 2.3% for the day to $0.1102, with its weekly print still at 12.1%. The escalation occurred just hours after President Donald Trump announced on Truth Social that the U.S. would begin 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 guided-missile destroyers, aircraft, and drones. In response, Iran announced that it had 'redefined the control zone' in Hormuz, extending its maritime borders to Fujairah, signaling that Tehran would regulate shipping traffic in the area regardless of U.S.

operations. Bitcoin had broken through the $80,000 barrier 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 been contributing to the risk-on tone heading into the week.

The validity of the U.S. denial or the emergence of fresh confirmations from either side will likely set the tone for the remainder of the U.S. session.