Bitcoin briefly dipped before surging over $82,000 on Sunday as US President Donald Trump rejected Iran's counteroffer to a peace deal, a move that could prolong tensions in the Middle East.
"I don't like it — TOTALLY UNACCEPTABLE," Trump said in a post to Truth Social on Sunday after reviewing Iran's proposal to end the war. Iran had previously requested that the US pay war reparations and unfreeze blocked Iranian financial assets.
Bitcoin (BTC) fell from $81,430 to $80,520 within 45 minutes of Trump's post before whipsawing nearly 2.3% to $82,347 less than three hours later, according to CoinGecko data. Bitcoin's rise also resulted in nearly $64 million worth of short positions being liquidated over the last four hours, according to Coinglass data.
The US-Iran conflict and the dispute over control of the Strait of Hormuz — which handles one-fifth of global oil trade — has caused significant disruption across financial markets over the past ten weeks. Oil markets were particularly affected, rising another 4.6% to $98.7 per barrel following Trump's latest comments. The S&P 500 futures index rose 0.13% since the market opened approximately two hours after Trump's post.
Trump's refusal to accept Iran's counteroffer dashed hopes of an imminent end to the war. Israeli Prime Minister Benjamin Netanyahu also stated the war would not be over until Iran's uranium sites are dismantled.
10x Research CEO Markus Thielen said Bitcoin's strength above $80,000 could be supported by two favorable decisions expected in the US Senate this week. "Two catalysts stand out this week," Thielen said, pointing to a Senate vote on Monday for Kevin Warsh's confirmation as Federal Reserve chair and the Senate Banking Committee's markup on the CLARITY Act on Thursday.
Thielen noted that while "Warsh is widely regarded as more hawkish on inflation" than current Fed Chair Jerome Powell, his confirmation would remove "uncertainty overhang." Thielen described the CLARITY Act as the "most significant piece of crypto legislation in years," adding that it could be a "turning point for regulatory certainty across digital assets."
"Both events lean bullish for Bitcoin: regulatory clarity reduces institutional friction, and a smooth Fed leadership transition avoids the policy uncertainty that typically pressures risk assets," Thielen added.
Despite the ongoing US-Iran conflict, Bitcoin has now risen 29.7% since the war began on February 28, when a US airstrike killed Iran's Supreme Leader Ayatollah Ali Khamenei. Bitcoin has outperformed both the S&P 500 and gold since the conflict started, clawing back some of the ground lost from October, when Bitcoin hit a high of $126,080.
Why it matters
Bitcoin has risen 29.7% since the US-Iran conflict began on February 28, outperforming both the S&P 500 and gold over the same period.
The Strait of Hormuz handles one-fifth of global oil trade; following Trump's rejection of Iran's counteroffer, oil prices rose 4.6% to $98.7 per barrel, illustrating how the conflict continues to move commodity markets.
The Senate Banking Committee has a markup of the CLARITY Act scheduled for Thursday — a procedural step that analyst Markus Thielen described as the 'most significant piece of crypto legislation in years' for regulatory certainty across digital assets.
