On Monday, bitcoin's value plummeted to $79,074 during late Asian trading hours, marking a nearly $1,500 reversal from its intraday high of $80,594, 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 allegedly disregarded 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, and this denial led to oil and equity futures scaling back their initial movements. Despite this, bitcoin maintained its decline 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 still managed to remain 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 a mere 0.2% for the day after starting Monday at $85.14.

XRP dropped to $1.40, while BNB fell to $623. Dogecoin, however, held its gains relatively better than most, rising 2.3% for the day to $0.1102, with its weekly print still at 12.1%.

This escalation occurred just hours after President Donald Trump announced on Truth Social that the US would start escorting ships stranded in the Persian Gulf through the Strait of Hormuz, beginning Monday, as part of an operation dubbed Project Freedom. This operation involves 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, 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 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.