Bitcoin and the broader cryptocurrency market came under pressure on Tuesday after the United States and Iran exchanged airstrikes, sending the dollar higher.
BTC, the leading cryptocurrency by market capitalization, fell to $62,657 during Asian trading hours, down almost 1% since midnight UTC, according to CoinDesk data. Ether (ETH), XRP (XRP), and solana (SOL) fell between 1% and 2.3%. WTI crude futures jumped more than 2% to $72.27, while the dollar index held above 101.00, maintaining Tuesday’s gains.
The United States said it launched “powerful strikes” against Iran following attacks on three ships in the Strait of Hormuz, including Qatari and Saudi oil tankers. In response, Iran said it had targeted “85 US military installations” in retaliation for strikes on its Hormozgan and Mahshahr provinces.
The scale of the escalation appears to have pushed the ceasefire between the two countries to the brink of collapse.
The war in Iran erupted in late February, pushing oil prices well above $100 a barrel and generating a massive inflationary shock globally. While prices have since fallen back below $60, inflation expectations among consumers have continued to rise, fueling fears of rising interest rates around the world, including in the United States.
Higher rates make it harder for traders to abandon returns on supposedly safe bonds in favor of higher-risk assets such as cryptocurrencies.
