Bitcoin reached US$70,000 for the first time in four days as concerns over the war with Iran eased following comments from US President Donald Trump.
The original cryptocurrency rose as much as 2.3% to $70,581 on Tuesday, rallying alongside equities while oil prices fell. Bitcoin later pared gains and was trading around $70,000 at 6:00 a.m. in London. The market reversal from Monday came after Trump said the conflict would resolve "very soon.”
Other cryptocurrencies also rose, though to a lesser extent. Ether, the second-largest digital asset, was up as much as 1.3%, while XRP and Solana gained as much as 1.4% and 1.2%, respectively. The tokens pared gains along with Bitcoin later in the day.
"Trump’s latest posts are being seen as potentially flagging an end to the Iranian conflict faster than the market was anticipating,” said Richard Galvin, co-founder of hedge fund DACM. "Risks are that the market is misreading Trump’s statements, or that either Israel, the USA or Iran takes action to further escalate hostilities and takes the option of de-escalation off the table.”
Trump sought to ease market jitters about energy prices during a Monday news conference at his resort in Doral, Florida. The president said his administration was "looking to keep the oil prices down.” He also raised the possibility of waiving some oil-related sanctions and US Navy escorts of tankers through the Strait of Hormuz.
Equities jumped when markets opened in Asia. The MSCI Asia Pacific Index climbed 3%, with technology shares leading gains. European stocks were also set to advance with contracts indicating a 1.3% gain.
Meanwhile, Brent crude fell 6% to $93 a barrel, well off its $119.50 peak on Monday.
Since the US and Israel initiated a bombing campaign on Iran on Feb. 28, Bitcoin has stood out as a relatively stable asset.
"The tape has been very strong for Bitcoin since the war started, with the $68,000 region being a very strong support,” said Pratik Kala, head of research at Apollo Crypto. "To the upside we are eyeing a strong push above $73,000 to take us to $87,000 as the next major resistance.”
So far this month, Bitcoin has even outperformed gold, a traditional inflation hedge. While Bitcoin initially fell when the bombing began - which happened while markets were closed - it has risen roughly 7% this month, while bullion has fallen about 2%.
This week, however, Bitcoin’s volatility has been on the rise. The asset’s 30-day implied volatility index reached a two-week high. The lack of conviction in Bitcoin’s price rally has become a recurring theme in recent months, as the asset has struggled to see significant gains in brief rallies since a sharp selloff in October. It remains down more than 40% from its peak above $126,000 that month.
Traders continued to seek downside protection in options markets, with Bitcoin puts traded on Deribit concentrated at the $60,000 level. - Bloomberg
