Crypto and traditional markets tumbled on Monday as the U.S. and Iran escalated threats toward one another for the fourth consecutive week, sending oil prices seesawing and risk assets into retreat. President Donald Trump posted on Truth Social on Sunday that the U.S. would “hit and obliterate” Iranian power plants if the country did not fully reopen the Strait of Hormuz within 48 hours.
Iran responded by threatening to target energy infrastructure and desalination facilities across the Gulf and warned it would completely close the Strait, one of the world’s most critical oil shipping lanes. Parliament speaker Mohammad Bagher Ghalibaf said attacks on Iran’s power plants would immediately be met with retaliatory strikes on energy and oil infrastructure throughout the region.
Bitcoin Falls as Liquidations Surge Past $336 Million
Bitcoin dropped 1.8% in the last 24 hours to $68,160, recovering from a low below $67,600 in late Sunday trading. The price decline triggered $336.3 million in liquidations across the crypto market, with nearly a third of that volume, approximately $100 million, caused by failed long positions. Smaller tokens also declined, with Ether and Solana each falling roughly 6% during the broader selloff.
The price of U.S. crude oil briefly spiked above $100 per barrel in early Monday trading before retreating to $97.20 and then climbing steadily back to $99.30. Brent crude jumped above $114 per barrel before settling below $113. In Asia-Pacific markets, South Korea’s KOSPI plunged 6.5%, Japan’s Nikkei 225 fell 3.5%, and Hong Kong’s Hang Seng dropped more than 4%.
Analysts Warn Oil-Driven Inflation Could Force Fed Repricing
Analysts cautioned that the market reaction reflects more than short-term geopolitical jitters. Brent’s price surge is feeding inflation expectations, and the probability of a Federal Reserve rate hike has jumped from zero to 12.4% in a single week, according to market analyst Rachel Lucas, representing a significant macro repricing that crypto will continue to reflect until clarity emerges on both fronts.
Lucas added that if the war in Iran de-escalates, crypto would likely be among the fastest-moving risk assets to recover. However, later on Monday, Trump announced a five-day postponement of strikes after claiming “productive conversations” with Iran—a statement Tehran denied, introducing further uncertainty.
Oil prices dropped sharply on the announcement, then partially reversed as markets digested the conflicting signals.
