Bitcoin soared nearly 2% on Monday morning, nearing the $66,000 mark, following a surprise announcement from U.S. President Donald Trump regarding a purported peace agreement with Iran. The declaration included a promise of a ‘toll-free opening’ of the strategic Strait of Hormuz, a crucial artery for global oil transport.
In a post on his Truth Social platform late Sunday, Trump proclaimed, “The deal with the Islamic Republic of Iran is now complete. Congratulations to all!” He went on to authorize the immediate removal of the U.S. naval blockade in the region, adding, “Ships of the World, start your engines. Let the oil flow!”
This announcement appears to have reignited investor confidence, with Bitcoin trading at $65,881 on Coinbase, marking its highest price in almost two weeks. The cryptocurrency has recovered significantly since dipping below the $60,000 threshold earlier this month, bolstered by renewed optimism in the market.
Andri Fauzan Adziima, research lead at Bitrue Research Institute, indicated that this potential agreement might dissipate a significant geopolitical risk premium that has loomed over cryptocurrencies. “Bitcoin has broken above $65,000, fueled by traders rotating back into crypto amid lower oil pressure and a broader stability narrative,” he stated, although he cautioned that possible last-minute issues could arise before the deal is finalized.
The deal's specific terms remain undisclosed, and its implementation hinges on Iran's formal sign-off, expected later this week under the mediation of Pakistan. Iran’s deputy foreign minister, Kazem Gharibabadi, confirmed the agreement on state television, asserting that a permanent cessation of hostilities would commence immediately.
The broader cryptocurrency market mirrored Bitcoin's rally, gaining approximately 2% in total capitalization, with several altcoins, including Hyperliquid (HYPE) and Zcash (ZEC), posting impressive double-digit gains.
Meanwhile, the announcement has stirred fluctuations in crude oil prices, with West Texas Intermediate (WTI) falling 5% to just above $80 per barrel, while Brent crude mirrored this decline, dropping to $83.30.
Looking ahead, the Federal Reserve's interest rate decision, scheduled for Wednesday, could inject further volatility into both cryptocurrency and oil markets. New chair Kevin Warsh's seemingly more accommodative stance on interest rates, amid rising inflation surpassing 4%, complicates the economic landscape.
As investors await further developments regarding the Iran deal and the Federal Reserve's policy direction, the cryptocurrency market remains on high alert, poised for potential swings in sentiment.
Source: Cointelegraph