Renewed geopolitical tensions sent cryptocurrency markets into a broad decline on Thursday. Bitcoin fell below the $71,000 threshold, trading at $70,981, marking a 0.5% drop for the day.
Crypto assets had rallied on Tuesday, fueled by optimism surrounding a two-week ceasefire agreement between the U.S. and Iran. However, cracks in the deal appeared less than 48 hours after it was signed.
Mohammad Bagher Ghalibaf, Speaker of the Iranian Parliament, stated publicly on Thursday that three provisions of the ceasefire agreement had been violated, though he did not provide specific details. Meanwhile, Israeli military operations in Lebanon continue unabated.
Central to the agreement was the reopening of the Strait of Hormuz, which has failed to materialize as expected. Despite Iran’s earlier commitment to allow "coordinated" passage, the strait remains effectively blockaded, with virtually no tanker traffic passing through.
Energy Market Volatility Intensifies
The crude oil market has shown extreme sensitivity to these shifting developments. Brent crude rebounded 2%, climbing back toward $97 per barrel, following a massive 10% drop the previous day—its largest single-day decline in six years. This sharp reversal underscores a rapid shift in market sentiment from "peace pricing" to deep skepticism regarding the sustainability of the ceasefire.
Other major crypto assets also faced downward pressure. Ethereum (ETH) fell 2.6% to $2,180, Solana (SOL) dropped 3.1% to $81.96, XRP dipped 3% to $1.33, and Dogecoin saw a 3.4% decline.
Global capital markets cooled in response. The MSCI Asia Pacific Index fell 0.9%, and futures for the S&P 500 and European indices both pointed to a 0.2% decline, snapping a four-day winning streak for global equities.
On the macroeconomic front, the Federal Reserve continues to emphasize risks related to inflation and labor market volatility, fueling expectations that interest rates will remain elevated. With oil prices climbing once again, concerns over a resurgence in inflation have regained dominance, wiping out earlier gains in the Treasury market.
