Bitcoin dips to $70.6K, oil rises after US announces Hormuz blockade

Bitcoin fell as low as $70,623 on Sunday after the US announced a blockade of the Strait of Hormuz following failed peace talks with Iran.

The price of Bitcoin (BTC) initially fell 1.9% to $71,686 after US President Donald Trump confirmed the blockade in a post to Truth Social on Sunday, adding that peace talks collapsed because Iran refused to end its nuclear program — the only issue that “really mattered.”

Bitcoin dipped further to $70,623 as the US futures markets opened late on Sunday, with oil shooting up 9.5% to $105 per barrel within half an hour of the market open, with Bitcoin down 2.7% over the day at the time of writing. 

The US-Iran dispute over control of the Strait of Hormuz — which handles one-fifth of global oil trade — has caused significant disruption in the financial markets over the past six weeks, particularly in oil markets, which have experienced their highest volatility since Russia invaded Ukraine in early 2022.

In addition to the ceasefire announced on Tuesday, Iran wanted the US to pay for war reparations and to unfreeze blocked Iranian financial assets. 

Trump didn’t directly address those requests in the Truth Social post, instead blaming the fallout on Iran’s reluctance to end its nuclear weapons program.

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He also labeled Iran’s use of mines on the waterway and demands for tolls as “world extortion,” ordering the US Navy to block any vessels that paid Iran and to destroy the mines.

Bitcoin up since the US-Iran war began

Despite the conflict, Bitcoin has risen about 7.4% to $71,194 since the US-Iran conflict started on Feb. 28, when a US airstrike killed Iran Supreme Leader Ayatollah Ali Khamenei.

Bitcoin has still managed to outperform the S&P 500 and gold since the US-Iran war started, though, clawing back some lost ground from October when Bitcoin hit a high of $126,080.

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