Less than a day after Bitcoin (BTC) reclaimed the $100,000 level, the flagship cryptocurrency has breached past $106,000 as US President Donald Trump announced that Israel and Iran have reached a “complete and total” ceasefire.
In his Truth Social post, Trump wrote that both nations have agreed on the terms of the ceasefire and will end the fighting in 24 hours. The news has eased market anxiety after a weekend of geopolitical uncertainty.
Bitcoin Price Surges After Trump Declares Ceasefire Between Israel and Iran
This came after Iran retaliated with a missile strike on Al Udeid Air Base, one of the largest US military bases in the Middle East, located in Qatar. However, Qatari air defense successfully intercepted the missiles, with no casualties or damage reported.
Iran’s Supreme National Security Council stated that the number of missiles fired matched the number of bombs dropped by the US on its nuclear sites, signalling a desire to de-escalate after retaliation. America and Qatar were informed ahead of time to prepare for the attack, with Qatar temporarily closing its airspace and urging civilians to shelter in place, and the US moving its military personnel and equipment from the base.
Trump thanked Iran for giving an early notice, which he claimed helped prevent any loss of life, and expressed optimism about achieving peace in the region. While Qatar, which acts as a mediator in regional conflicts, initially expressed disappointment and condemned the violation of its sovereignty, the nation emphasized its commitment to diplomacy.
At press time, the ceasefire is in effect.
Bitcoin, which had been on an upward trajectory since Monday, rose another 3% on the back of the news, topping $106,000. This came after the apex crypto plunged to as low as $98,500 on Sunday after Trump struck three key nuclear research facilities in Iran and called for a regime change in the Islamic Republic.
Iran responded by threatening to attack US bases in the Middle East and closing the Strait of Hormuz – a shipping route that handles 20% of global oil trade. The sudden price dip created panic and triggered over $1 billion in crypto liquidations, with $193 million in bullish Bitcoin long positions exiting the market.
Markets were bracing for oil and gold prices to skyrocket come Monday. While the prices of both surged briefly, they fell back quickly as the US, Israel, and Iran opened diplomatic channels.
Crypto and Equities Rise as Fears Over Prolonged Middle East War Die Down
BTC price has slightly pulled back from its daily peak to around $105,500, but continues to hold onto the majority of its gains. The positive sentiment was also seen in the traditional markets, with US stock index futures gaining approximately 0.5% across the board.
The price of crude oil, which had soared to over $75 a barrel early on Monday, tumbled to just $65/barrel following the ceasefire announcement. The altcoin market also made positive moves, with the price of Ether (ETH), XRP, and Solana (SOL) sporting impressive gains of 8-10%.
While there was some confusion over the validity of President Trump’s announcement, a senior Iranian official confirmed Tehran’s agreement with Washington to a proposed peace deal with Tel Aviv, lending credence to the market’s optimistic reaction. However, the conflict has prompted investors to adopt a more cautious, risk-averse posture.
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Bitcoin Hashrate Drops Amidst Iran-Israel Conflict
Crypto analysts also noticed a significant decline in Bitcoin’s hashrate in the last 72 hours. The blockchain’s computing power fell from 943.6 million terahashes per second (TH/s) on Sunday to 865.1 million TH/s, dropping by 8%. This sparked speculation about potential disruptions to Bitcoin mining operations in the region.
Some industry experts have long been speculating that unauthorized mining sites operating in Iran could be drawing as much as 2 gigawatts of electricity. While these claims have never been verified, it is also nearly impossible to estimate the country’s mining capacity due to a lack of transparent data.
Daniel Batten, a prominent analyst, dismissed the claims by arguing that such fluctuations in mining hash rate are common and are tied to temporary reductions in electricity output within the United States. This occurs during periods of extreme weather, when Bitcoin miners are incentivized to temporarily shut down operations to reduce load on the electricity grid.
The latest such case occurred on April 22, when the hashrate plunged 27% following intense weather events in Texas and Oklahoma that disrupted the energy supply.
Federal Reserve Likely to Reduce Interest Rates by November
Another positive catalyst for Bitcoin’s price is that the US Federal Reserve has hinted at lowering its borrowing interest rates in the near term. According to the CME Group’s FedWatch tool, over the past week, the probability of the central bank maintaining its current interest rate of 4.25% through November has dropped from 17.1% to 8.4%, and the odds of rates falling to 3.75% or lower by the same period have increased to 53%.
The hopes of long-term peace in the Middle East and possible rate cuts from the Fed have traders betting on a $110,000 Bitcoin. While this prediction may seem premature, the apex crypto’s swift rebound above $100,000 suggests that retail and institutional interest remains firm amid geopolitical events.
At the time of writing, Bitcoin (BTC) is trading at $105,803, up 3.87% in the last 24 hours.
