Trump Threatens Iran, Houthis After Tanker Attacks, Stirring Crypto Risk

U.S. President Donald Trump expressed reservations about a peace agreement with Iran, heightening geopolitical uncertainty. At the same time, Federal Reserve Chair Warsh struck a hawkish policy tone, dampening expectations for interest-rate cuts. Shifts in rates and risk-aversion are affecting global liquidity, putting Bitcoin and other high-risk assets under renewed repricing pressure.

Market attention has now turned to U.S. PCE inflation data as investors wait to see whether it alters the Fed’s policy path. Wintermute said the deteriorating prospects for an Iran agreement and the Fed’s hawkish shift were weighing on buying demand. U.S. spot Bitcoin ETFs recorded $2.1 billion in net outflows in June, prolonging discount pressure and prompting more cautious crypto trading.

The conflict between the United States and Iran has heightened geopolitical risks in the Middle East, while concerns over oil supplies and inflation weighed on global risk assets at one point. Bitcoin and crypto-related stocks such as Coinbase and Strategy are highly sensitive to liquidity and safe-haven sentiment, meaning signs of a ceasefire or negotiations are quickly reflected in cryptocurrency prices and U.S. equities.

U.S. President Donald Trump said in July that military operations against Iran were progressing better than expected and that a conflict initially projected to last four to five weeks could end early. He also said U.S.-Iran negotiations had made significant progress. The comments pushed Bitcoin back above $69,000, extended gains in crypto-related stocks and the broader U.S. equity market, and sent oil prices sharply lower.

The United States launched a fresh wave of airstrikes against Iranian military targets, while Trump said US forces would intensify their attacks, rapidly raising the risk of further escalation in the Middle East. Crypto assets have long been sensitive to global liquidity and risk-off sentiment, and the selloff reflected investors shifting toward relatively safer assets such as the US dollar.

After news of the airstrikes emerged on July 19, the crypto market lost about $80 billion within 24 hours, pushing its total market capitalization to its lowest level since mid-April. Bitcoin fell below $73,000, while Ether dropped below $1,970. Iran’s Islamic Revolutionary Guard Corps later said it had launched airstrikes against US forces, further intensifying market panic.

The United States and Iran have long been at odds over Tehran’s nuclear program, economic sanctions and security in the Middle East. Any escalation could also affect energy supplies and global risk assets. US President Donald Trump has revived negotiations while insisting that Iran cannot possess nuclear weapons, making diplomatic developments an important source of volatility for bitcoin and crypto-related stocks.

Trump recently said Iran had called him and was “desperate to make a deal,” as the two countries advanced a new round of negotiations. He reiterated that he would not accept Iran retaining nuclear weapons. Prediction market Polymarket showed traders raising the probability of a peace agreement by April 30 to 65%. Bitcoin briefly fell below $104,000 before crypto-related stocks broadly advanced.

The United States and Iran have long been at odds over Tehran’s nuclear program, sanctions and security in the Strait of Hormuz. Any military action could affect oil supplies, global financial markets and risk appetite for cryptocurrencies. Trump’s shifting policy positions have prompted markets to use the acronym “TACO” to mock what they see as a pattern of retreating after issuing tough threats.

Trump said he had canceled a plan to bomb Iran on May 19 in response to requests from the leaders of three Middle Eastern countries and would pursue diplomatic negotiations instead. Iran proposed an arrangement involving the Strait of Hormuz in exchange. After the announcement, the crypto community seized on “TACO Monday” and questioned whether geopolitical messaging could be used to sway market sentiment.

U.S. President Donald Trump warned that the United States was prepared to bomb Iran, citing suspected covert transfers of Iranian missiles and the U.S. seizure of a vessel carrying Chinese materials. An escalation of the conflict in the Middle East could drive up oil and safe-haven asset prices while putting selling pressure on highly volatile risk assets such as Bitcoin.

Trump recently said the "clock is ticking" for action against Iran and rejected a proposal from Tehran. Iran's air-defense systems were subsequently reported to have intercepted hostile targets. U.S. crude futures briefly surged by $5 on the news, while Bitcoin fell below $76,000 and Ethereum dropped under $2,300. Crypto-related stocks including Coinbase and Robinhood also declined.

Iran’s Kharg Island is the country’s main oil-export hub, making its security critical to global energy supplies and shipping through the Strait of Hormuz. If the U.S.-Iran conflict spills over into energy infrastructure, it could increase inflation risks and alter the Federal Reserve’s timetable for interest-rate cuts. That, in turn, could hit volatile assets such as Bitcoin.

After the U.S. military carried out airstrikes on Kharg Island on March 13, Iran warned that it would retaliate against Gulf countries if its energy facilities were destroyed. U.S. President Donald Trump also threatened more intense attacks unless Iran compromised that evening. International oil prices briefly topped $116 a barrel, fueling demand for safe-haven assets, while shifting macroeconomic expectations drove volatility across crypto markets.

The Strait of Hormuz carries a significant share of the world’s oil and natural gas shipments. A blockade could drive up energy prices and inflation while hurting risk appetite across financial markets. U.S. President Donald Trump has used the threat of military action to pressure Iran to reopen the waterway, leaving Bitcoin and other crypto assets once again sensitive to geopolitical developments and safe-haven capital flows.

Trump recently gave Iran a two-week deadline to reopen the Strait of Hormuz or face a possible attack, while also signaling a two-week ceasefire. Investors bet that the conflict would ease, lifting the total cryptocurrency market capitalization by about 2.5%. Bitcoin briefly rose to $69,500, triggering about $255 million in short liquidations across the market.

U.S. President Donald Trump raised his condition for a ceasefire with Iran to “unconditional surrender” and ruled out a separate deal, escalating risks surrounding the nuclear dispute, the regional conflict and shipping through the Strait of Hormuz. The strait is a critical artery for global oil shipments. Concerns about military strikes or a blockade could drive up oil prices, the dollar and demand for safe-haven assets while weighing on risk assets such as bitcoin and stocks.

As of July 19, Trump had given Iran 48 hours to open the Strait of Hormuz or face attacks on its power plants, adding that any retaliation would draw an “extremely hard” response. Bitcoin briefly fell below $69,200 and traded as low as about $68,000 after the announcement. Oil rose, while ether, solana and global equities also came under pressure.

The conflict in the Middle East has heightened risks to energy supplies and financial markets. U.S. President Donald Trump’s decision on whether to strike Iranian energy facilities has affected global oil prices, demand for safe-haven assets and crypto markets. Bitcoin had fallen more than 3% amid concerns over the conflict and a broader market selloff, underscoring the continued influence of geopolitical shocks on its short-term performance.

Trump said on July 19 that he would extend the pause on strikes against Iranian energy facilities by another 10 days, helping market sentiment recover slightly. Bitcoin subsequently pared its losses. Brent crude fell 2% to $109 a barrel, indicating that the risk premium had not fully dissipated.