Key facts
- Bitcoin and other cryptocurrencies surged following reports of a US-Iran peace agreement.
- The agreement aims to reopen the Strait of Hormuz and ease geopolitical tensions.
- Oil prices fell sharply, with WTI crude futures dropping over 4.8% to $80.77.
- Asian stock markets, including Japan's Nikkei 225 and South Korea's Kospi, opened higher.
- Analysts attribute the market rally to improved risk sentiment and a reduction in geopolitical risk premium.
Bitcoin surged above $65,000, nearing a two-week high, as reports of a peace agreement between the United States and Iran to reopen the Strait of Hormuz eased geopolitical fears. The deal, announced by President Donald Trump, is expected to take effect on Friday and involves lifting the US naval blockade.
This development triggered a broad risk-on sentiment across global markets. Bitcoin rose 2.4% to trade around $65,793, with Ethereum, XRP, and Solana also posting gains. Asian equities opened higher, with Japan's Nikkei 225 jumping nearly 5% and South Korea's Kospi surging over 5.6%. S&P 500 futures also saw an increase.
Conversely, crude oil prices tumbled over 4% to their lowest levels in over three months, with WTI futures falling to $80.77 per barrel and Brent crude to $83.53. Analysts noted that the market movement was driven by a compression of the risk premium rather than a shift in underlying fundamentals, with the crypto bounce amplified by thin weekend liquidity.
Traders are closely monitoring further confirmation of the deal, specific terms for Hormuz, potential re-escalation, and crude oil's trajectory, alongside an upcoming Federal Reserve meeting. The Federal Reserve, under new Chair Kevin Warsh, is expected to provide guidance on future rate policy.