Key facts
- Iran denied reports of a US-Iran agreement to extend a 60-day ceasefire.
- Bitcoin erased earlier gains and experienced volatility following Iran's denial.
Bitcoin erased earlier gains and traded volatilely after Iran's Foreign Ministry spokesperson denied reports of a US-Iran agreement to extend a 60-day ceasefire. Oil prices rebounded amid escalating Middle East tensions, including Iranian drones targeting the Kurdistan Region of Iraq.
The geopolitical situation between the US and Iran directly impacts global oil supply and investor sentiment, influencing volatile markets like Bitcoin and crude oil prices. Any perceived de-escalation or escalation in the region can trigger significant market movements.
Bitcoin experienced volatility on Monday as reports circulated about a potential US-Iran agreement to extend a 60-day ceasefire. However, Iran's Foreign Ministry spokesperson, Esmaeil Baqaei, stated on August 17 that no such 60-day deadline exists within the memorandum of understanding (MoU) with the US, asserting that Iran does not formulate policy under pressure or time constraints.
Baqaei clarified that the MoU anticipated a 60-day window for discussions on sanctions relief and the nuclear issue, which could have been extended by mutual consent. He indicated that due to Iran's perception of a "blatant and widespread violation" of the ceasefire, the 60-day period is now irrelevant. Bitcoin erased earlier gains following this denial. Negotiations concerning the Strait of Hormuz, involving Oman, are reportedly delayed due to complexities and multiple countries' involvement, with discussions continuing on guaranteeing sovereignty and safe passage.
The Wall Street Journal reported that Iranian leaders do not intend to end the conflict, viewing the MoU as an attempt by the US and Israel to alleviate global economic pressure and gain time for larger attacks. Tensions escalated as Iranian-made drones targeted the office of Kurdistan Region of Iraq Prime Minister Masrour Barzani, who condemned the strikes as a "dangerous escalation."
Oil prices rebounded, with crude jumping above $83 per barrel after the Iranian spokesperson's denial. US President Donald Trump reiterated that Iran cannot possess nuclear weapons. Bitcoin's price traded between $63,000 and $63,700, reflecting trader uncertainty. Goldman Sachs' view that markets remain too hawkish, despite cooling inflation, led to a further slip in the odds of a Fed rate hike, contributing to a significant jump in Bitcoin's trading volume. Polymarket data indicates a decreased likelihood of Bitcoin reaching $67,500 in August.