Bitcoin Surges Amid US-Iran Peace Agreement
Bitcoin experienced a notable increase, reaching its highest point in almost two weeks, following the announcement that the United States and Iran had come to an agreement to halt hostilities and reopen the crucial Strait of Hormuz.
The original cryptocurrency climbed as much as 5.1% on Monday, trading around $67,250, as investors returned to buying riskier assets. Ether, the second-largest cryptocurrency, surged nearly 11% to about $1,850 at one point, while other smaller tokens like Solana and XRP also enjoyed significant gains.
This upward movement comes after Bitcoin dipped below $60,000 earlier this month, marking its lowest price since October 2024 amid recent market disruptions. Notably, Michael Saylors Strategy, the largest corporate buyer of Bitcoin, disclosed that it had sold a small portion of its holdings this month, which contributed to the decline alongside heavy outflows from exchange-traded funds. However, the company has revived its Bitcoin purchases in recent weeks, buying $100 million worth through common stock sales just last week, in addition to a similar amount the week prior.
Jeffrey Kendrick, the Global Head of Digital Asset Research at Standard Chartered, believes that the crypto market has found its bottom, identifying $83,000 as a critical level for Bitcoin to monitor.
Risk appetite appeared to rebound after former President Donald Trump announced on social media that the peace deal with Iran was finalized and that the US would lift its blockade on the Strait, a vital route for trade. Following this, stocks rose across Europe on Monday, and U.S. stock futures climbed as well. Meanwhile, Brent crude oil prices fell by over 4%.
According to Daniela Hathorn, a senior market analyst at Capital.com, the new agreement between the US and Iran could serve as an “interesting test” for Bitcoin. She noted that throughout the conflict, cryptocurrencies had behaved like high-beta risk assets due to geopolitical uncertainty, ETF outflows, rising yields, and faltering market sentiment. Hathorn suggested that a successful deal could alleviate some significant macro risks for the market, potentially bolstering overall risk appetite—especially if it leads to lower oil prices and mitigates inflation worries.
The easing of tensions in the Middle East might push risk assets higher ahead of Kevin Warsh’s initial meeting as the Federal Reserve chairman this week. Nonetheless, signs pointing to rising interest rates are likely to put pressure on cryptocurrencies.
