Bitcoin and gold prices declined on Tuesday, February 17, 2026, as investors reacted to escalating geopolitical uncertainty ahead of renewed U.S.-Iran nuclear negotiations in Geneva. Bitcoin fell to $68,194, while gold slipped below $4,930. The pullback was triggered by comments from U.S. President Donald Trump, who warned Iran of "consequences" if no agreement is reached, signaling his indirect involvement in the talks. U.S. stock futures also moved lower, reflecting cautious sentiment across global markets.
The tensions were further amplified by Iran's Revolutionary Guard conducting live-fire missile drills near the Strait of Hormuz, one of the world's most critical oil shipping lanes, accounting for roughly 20% of global petroleum shipments. The timing of these drills, coinciding with the high-stakes negotiations, was seen as a strategic move. Both sides have taken firm stances, with Iran warning of retaliation against aggression and the U.S. hinting that military options remain on the table.
The situation highlights the region's fragility and its potential for widespread economic ripple effects. Historical precedent shows that uncertainty in the Strait of Hormuz can cause oil prices to spike rapidly; for instance, a previous escalation in June 2025 saw prices surge 21% from $63 to $77 in days. Rising oil prices typically fuel inflation expectations, as higher energy costs filter through supply chains to consumer prices over subsequent months.
This repricing of inflation risks has direct implications for central bank policy. Policymakers may be forced to delay interest rate cuts or maintain higher borrowing costs for longer, shifting from a dovish to a more hawkish stance. Such a shift tightens global liquidity and often strengthens the U.S. dollar, a combination historically negative for risk assets like cryptocurrencies.
The event underscores Bitcoin's increasing correlation with macro shocks and traditional financial markets. Research indicates its sensitivity has grown alongside institutional adoption, ETF launches, and corporate treasury holdings, integrating it more deeply into the global financial system. While Bitcoin retains unique drivers like its fixed supply, it now behaves as a liquidity-sensitive asset in the short term, reacting to capital flows and monetary policy cycles.
Traders are closely monitoring the ongoing negotiations, with recent reports indicating Iran has offered partial concessions, including a proposal to pause uranium enrichment temporarily. The key U.S. demand for a complete halt remains a point of contention. Market participants are also watching the U.S. dollar index (DXY) and bond yields for signals on risk sentiment.
