The price of bitcoin plummeted 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 alleged that two missiles had struck a US patrol boat near Jask Island after the vessel failed to heed Iranian warnings to leave the area. As a result, Brent crude oil prices surged by more than 5% to exceed $113 per barrel before partially retracing their gains. However, the US promptly denied the report, stating that no American ship had been attacked.
While oil and equity futures pared their initial movements 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 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 fell to $623. Dogecoin managed to hold its gains relatively 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 commence 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 declared that it had 'redefined the control zone' in Hormuz, extending its 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.
The Senate's Clarity Act compromise on stablecoin yield, released on Friday, had contributed to the risk-on tone heading into the week. The US denial's validity and potential fresh confirmations from either side are likely to influence the market's trajectory for the remainder of the US session.