In brief
- Bitcoin rose Monday after U.S. markets opened, but was roughly even over the past 24 hours.
- Stocks faced pressure as the Middle East conflict appeared to widen.
- Gold and silver slipped, underperforming digital assets.
Bitcoin outpaced major U.S. stock indexes on Tuesday, rising as investors weighed the prospect of a prolonged military conflict between the U.S. and Israel against Iran.
The leading digital asset by market cap recently changed hands at $68,783, roughly even over the last day according to CoinGecko, but up by about $2,000 since U.S. markets opened. The cryptocurrency had fallen as low as $66,300 earlier on Tuesday before staging a recovery.
Although Bitcoin has tumbled in recent months, the digital asset jumped toward $70,000 on Monday amid expectations of higher inflation in the U.S., which analysts linked to rising energy prices and the prospect of increased U.S. military spending.
On Myriad, a prediction market owned by Decrypt's parent company Dastan, traders grew less confident that Bitcoin would fall $55,000 (58%) before hitting $84,000 (42%), thought overall sentiment remains bearish.
On Tuesday, the tech-heavy Nasdaq led losses among major U.S. stock indexes, sliding 1%. That decline slightly outpaced the S&P 500, while the Dow Jones dropped by 369 points.
U.S. President Donald Trump has projected that “Operation Epic Fury” could last four to five weeks, while still emphasizing that America has the “capability to go far longer.” Meanwhile, Iran has fired missiles at its neighbors, widening the conflict’s scope in the Middle East and jeopardizing the flow of oil through the Strait of Hormuz.
On Tuesday, Trump indicated from the White House that the U.S. continues to hammer Iran, targeting more leaders in the wake of Supreme Leader Ayatollah Ali Khamenei’s death.
“There was another hit today on the new leadership, and it looks like that was pretty substantial,” Trump said. “So they’re getting hit very hard.”
Myriad traders foresaw a 45% chance that the U.S. and Iran would reach a ceasefire agreement before April and a 38% chance that the current Iranian regime would fall by October.
Jake Ostrovskis, Head of OTC at crypto market maker Wintermute, wrote in a note that the most important indicator for cryptocurrencies may be the price of oil. Brent crude pushed higher on Tuesday, rising 4.5% to $81 per barrel, according to Yahoo Finance.
“If Brent stays above $80 for more than a few sessions, the re-inflation narrative hardens and the March rate cut that was already a long shot becomes impossible,” he wrote, in reference to the Federal Reserve’s decision at its next policy meeting.
Traders penciled in a 2.6% chance that the Fed lowers interest rates by a quarter of a percentage point at its next meeting, per CME FedWatch.
Despite benefiting from recent bouts of geopolitical uncertainty, the price of gold fell 3.6% to around $5,119 per ounce, according to Yahoo Finance. Silver showed greater losses, skidding around 6.2% to around $83 per ounce as the conflict showed no signs of easing.