A brief Sunday rally did not survive contact with Monday.
Bitcoin fell to $66,702 in early Monday trading, down 1.1% over the past 24 hours, as traditional markets reopened and began pricing in the U.S.-Iran standoff as the crypto had traded in isolation since Saturday.
Sunday’s rise to $68,000 on the Khamenei confirmation has now mostly been wound down, with the market falling back to the mid-$66,000 range that preceded the strikes.
The broader crypto picture was mixed. Ether fell 2.5% to $1,967, solana fell 4.1% to $84, and XRP lost 3.6% to $1.36. The weekly figures show the real damage, with solana down 8.1% over seven days, leading to losses among majors.
Traditional markets told the story that crypto preempted. Brent crude rose as much as 13% at the open before settling at around $77.50, still up 6.4%, the biggest jump since Russia’s 2022 invasion of Ukraine.
The Strait of Hormuz, through which about a fifth of the world’s oil flows, is effectively closed, according to Bloomberg. Asian shares fell 1.4% and US stock futures fell 0.7%. Gold rose to $5,350 per ounces.
The oil movement is what matters most to crypto’s direction in the short term. Higher energy prices contribute directly to inflation expectations, which push back the timeline for Fed rate cuts, which tighten the liquidity conditions that drive risk asset prices.
But the situation remains fluid. Conflicting reports emerged Monday about whether Iran is seeking to resume nuclear talks with the United States. The Wall Street Journal reported a new push to negotiate, while Iran’s national security chief Ali Larijani said the country will not negotiate.
Earlier Sunday, Trump said the bombing campaign will continue until the targets are reached, although The Atlantic reported that he agreed to talk with Iran’s new leadership.
Meanwhile, some crypto traders say further downside risks to the market may be limited.
“Given that Iran has been isolated from global financial markets for quite some time, we believe that downside risk is limited,” said Jeff Mei, Chief Operating Officer at BTSE.
“Some have been concerned about oil prices and their potential impact on inflation, but the world has weaned itself off Iranian oil and increased supply from OPEC and the US should be enough to stabilize prices.”
Whether that turns out to be true depends on whether the Strait of Hormuz reopens and how long it takes to achieve Trump’s “goal.” Until both of these questions are answered, crypto is trading as a risky asset in a world that just got riskier.
