Cryptocurrencies surged on Monday, led by sharp gains in Bitcoin and Ethereum, after a dramatic 6% drop in oil prices revived risk appetite across global markets. The catalyst: an unexpected pause in US military strikes against Iran and renewed diplomatic signals from both sides.
Brent crude futures tumbled to around $90.93 a barrel, while West Texas Intermediate fell 6.1% to $83.83, as Washington halted a 13-night bombing campaign. President Trump’s UN envoy stated the US was “giving talks some space,” and Iran reciprocated by suspending retaliatory attacks while the pause holds. The de-escalation punctured the war premium that had briefly driven Brent above $100 a barrel last week.
Equities rallied, with the pan-European STOXX 600 climbing 0.8%, and that buoyancy spilled into digital assets. Bitcoin broke above its recent trading range, gaining more than 3% in a matter of hours, while Ethereum posted similar gains. Analysts noted that the collapse in energy costs eased inflation fears, reducing the odds of further aggressive rate hikes by the Federal Reserve, which is set to meet this week.
“The rapid unwinding of oil’s risk premium is a clear positive for all risk assets, including cryptocurrencies,” said an ING analyst. “It lowers input costs, cools expectations for tighter monetary policy, and improves overall market sentiment.”
Additional support came from a busy week of US tech earnings – Microsoft, Meta, Amazon, and Apple are all set to report – which could further validate the AI-driven rally that has also benefited crypto tech plays.
However, risks remain. Shipping through the Strait of Hormuz and the Bab el-Mandeb remains disrupted, and both Washington and Tehran warned that strikes could resume if talks fail. Still, for now, the relief rally has given Bitcoin and Ethereum a strong push as investors reposition for a less hawkish macro environment.
