The global crypto asset market is under pressure following the reheating of diplomatic relations between the United States and Iran. Bitcoin, as the crypto asset with the largest market capitalization, recorded a decline in early-week trading, hovering around the US$62,810.62 price range.
Geopolitical uncertainty around the Strait of Hormuz has become the main trigger for negative investor sentiment. The cease-fire that once offered hope for market stability has now faded, along with fears of a conflict escalation that could trigger a spike in global crude oil prices.
Richard Galvin, CEO of crypto investment firm DACM, explained that the rise in oil prices triggered by the conflict tensions has the potential to push inflation back up. This condition forces central banks to maintain high interest rates, directly depressing investor appetite for risky assets such as Bitcoin and other cryptocurrencies, including Ethereum, BNB, and XRP.
In addition to geopolitical factors, Bitcoin's decline was also exacerbated by sluggish trading volumes on US stock exchanges. Market participants are now behaving more cautiously in allocating capital amid macroeconomic threats triggered by the conflict in the Middle East.
