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 seen since January 31. This downturn occurred after Iran's Fars news agency reported that two missiles had hit a US patrol boat near Jask Island, allegedly due to the vessel ignoring Iranian warnings to leave its territorial waters.

As a result, Brent crude prices surged over 5% to exceed $113 per barrel before paring back some of the 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 touching $2,368 earlier. Solana was priced at $84.08, up only 0.2% for the day after starting Monday at $85.14.

Meanwhile, XRP slipped to $1.40, and BNB fell to $623. Dogecoin, however, managed to hold its gains better than most, with a 2.3% increase for the day to $0.1102, and its weekly print still at 12.1%. The escalation occurred just hours after President Donald Trump announced on Truth Social that the US would begin 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 signaled that it would regulate shipping traffic in the area regardless of US operations. Earlier on Monday, bitcoin had broken the $80,000 mark for the first time since January, with $301 million in shorts liquidated as the move unfolded. 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 US denial's validity and any potential fresh confirmations from either side are likely to set the tone for the remainder of the US session.