- Bitcoin and Ethereum surged after the US said it would extend its deadline with Iran.
- Trump has used increasingly aggressive rhetoric.
- Crypto has been more volatile since the war between Israel, the US and Iran started.
The crypto market surged after President Donald Trump and Iran agreed to a two-week ceasefire in order to continue talks.
The price of Bitcoin jumped above to $72,000, surging nearly 5% over a 24-hour period, according to CoinGecko. Ethereum surged higher, hitting $2,257 — a 6% rise over the past day.
“Almost all of the various points of past contention have been agreed to between the United States and Iran, but a two week period will allow the Agreement to be finalized and consummated,” Trump wrote on Truth Social ahead of the attacks.
The news came after Trump on earlier on Tuesday said that “a whole civilisation will die tonight” before the US started hitting Iran’s infrastructure, leading to a crypto market selloff.
The president had given Iran a deadline to open the strategic Strait of Hormuz waterway.
Oil price booms
Crypto markets have been more volatile since the beginning of the war with Bitcoin doing better than equities on the whole but suffering when the oil price spikes.
WTI crude hit $115.8 a barrel Tuesday after the US hit Kharg Island, the hub for roughly 90% of Iran’s oil exports. Crypto markets were trading lower.
On the whole, when energy prices increase, inflation rises, central banks postpone rate cuts, and the liquidity that Bitcoin needs to perform well is restricted. Crypto markets have in the past done well in a low interest rate environment.
Still, market observers have said crypto faces selloffs in the immediate short term of new bombing campaigns and as of late, institutional investors are actually increasing their positions.
Up from here?
Analysts previously told DL News that an immediate ceasefire would immediately lead to flows back into crypto markets — and that appears to have happened.
Bitcoin and Ethereum have been very sensitive to macroeconomic headlines and largely performing like “risk-on” assets.
Chief Business Officer of sFOX, Diana Pires, said in a note shared with DL News that any news of a ceasefire would help crypto.
“Heading into the weekend, sentiment was heavily skewed bearish and short interest had built up across the market,” she wrote.
“Once ceasefire headlines hit, that positioning had to unwind, and that’s what drove the move higher.”
