The crypto market fell 2% to $2.42 trillion after U.S. President Donald Trump said Iran’s proposal to end the war was not enough and warned that Tehran must reopen the Strait of Hormuz by the deadline or face strikes on key infrastructure.
Summary
- Crypto market cap fell 2% to $2.42 trillion after Donald Trump rejected Iran’s ceasefire proposal and warned of strikes if Hormuz is not reopened.
- Iran declined a 45-day ceasefire push while demanding sanctions relief and war compensation, as a Tuesday deadline for U.S. action approaches.
- Bitcoin pulled back below $69K and major altcoins slipped 1–2% as traders turned cautious ahead of potential escalation or de-escalation.
In a sternly worded statement, Trump warned that an Iranian proposal to end the ongoing war in the Middle East is “not enough” to call off his strikes against Iranian infrastructure unless Tehran commits to settling its disputes by reopening the Strait of Hormuz.
“It’s a significant proposal. It’s a significant step. It’s not good enough, but it’s a very significant step,” Trump told reporters. He added that intermediaries “are negotiating now”.
The Strait of Hormuz, which is a strategic gateway for global energy supplies, was effectively blocked as a result of Iran’s attacks in the Gulf region after U.S. and Iranian forces clashed. This has led oil prices to skyrocket and has sparked widespread fears of runaway inflation hurting both crypto and traditional markets.
Trump said the Tuesday deadline for U.S. attacks on Iranian infrastructures would continue to be set in motion unless Iran accepts a deal to reopen the strait, allowing free trade in the region.
Earlier on Monday, Pakistan had put forward a 45-day ceasefire proposal after weeks of trying to broker a diplomatic solution to the war between Iran and the U.S. and Israel.
Iran had reportedly rejected the proposal while pushing for a permanent end to the war. Other demands made by the Iranian government include the removal of sanctions from the central bank and compensation for wartime damages incurred.
While the U.S. government has reviewed the proposal, Trump has so far refused to blink, with war continuing as of press time. Trump has reportedly reiterated that the deadline for compliance still stands at 8 pm Washington time on Tuesday. If Iran fails to agree to a deal, the U.S. could bomb Iran ‘back to the stone ages’.
The crypto market rose to a peak of $2.47 trillion on Monday as reports of Iran considering a proposal to bring a permanent end to the war first surfaced. Investors took this as a sign of de-escalation of the war situation.
However, after Trump confirmed that the U.S. would go forward with its strikes, the market tanked back to $2.43 trillion, erasing some of the gains from the previous day as investors booked profits.
Bitcoin (BTC), the world’s largest crypto asset that is currently strongly influencing other crypto assets due to the war situation, rallied past the $70,000 psychological resistance on Tuesday. However, the asset has fallen back sharply, trading at $68,546 at press time.
Ethereum (ETH), BNB (BNB), XRP (XRP), and Solana (SOL) were down 1-2%, showing traders remain hesitant as they await more clarity about how the standoff ends today.
On one hand, a potential confirmation of peace or de-escalation of the current Middle East conflict could result in a jump in investor appetite for risk assets, thus benefiting cryptocurrencies.
On the other hand, if the U.S. carries forward with the strikes on Iran, it can result in a massive flight to safety and a deeper correction across the entire crypto market.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
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