On Monday, bitcoin's price dropped to $79,074 during late Asian trading hours, marking a nearly $1,500 decline from its intraday high of $80,594, 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 after the vessel disregarded Iranian warnings to leave its territorial waters, prompting a more than 5% increase in Brent crude prices to over $113 per barrel. However, the US promptly denied the report, stating that no American ship had been struck, which led to oil and equity futures paring their initial moves.
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 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 only 0.2% for the day after starting Monday at $85.14.
XRP fell to $1.40, while BNB dropped to $623. 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 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, signaling that Tehran would regulate shipping traffic in the area regardless of US operations. Earlier on Monday, bitcoin had broken 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, released on Friday, had been contributing to the risk-on tone heading into the week.
The US denial's validity and potential fresh confirmations from either side will likely determine the market's direction for the remainder of the US session.