Bitcoin and the broader cryptocurrency market came under pressure on Tuesday after the US and Iran exchanged airstrikes, sending the dollar higher.
BTC, the leading cryptocurrency by market cap, fell to $62,657 in Asian hours, down nearly 1% since midnight UTC, according to CoinDesk data. Ether (ETH), XRP (XRP) and solana (SOL) fell between 1% and 2.3%. WTI crude futures jumped more than 2% to $72.27, while the dollar index held steady above 101.00, maintaining Tuesday’s gains.
The US said it launched “strong strikes” against Iran after attacks on three ships in the Strait of Hormuz, including Qatari and Saudi tankers. In response, Iran said it targeted “85 US military installations” in retaliation for attacks on its Hormozgan and Mahshahr provinces.
The scale of the escalation appears to have pushed the two nations’ ceasefire to the brink of collapse.
The Iran war broke out in late February, pushing oil prices well above $100 a barrel and generating a massive inflationary shock worldwide. While prices have since fallen back below $60, inflation expectations among consumers have continued to rise, fueling fears of interest rate hikes around the world, including in the US.
Higher rates make it harder for traders to give up returns from supposedly safe bonds in favor of higher-risk assets such as cryptocurrencies.
