Bitcoin rises as U.S.-Iran strike pause sends oil tumbling

Bitcoin rose on Monday as a weekend halt in U.S. and Iranian military strikes sent oil prices tumbling and lifted risk appetite across global markets. The largest cryptocurrency gained roughly 1.5% in early trading, hovering near $64,000 as traders reassessed geopolitical risk ahead of a Federal Reserve policy decision later this week.economictimes.indiatimes+1

Ceasefire Hopes Drive Oil Lower, Risk Assets Higher

The rally followed President Donald Trump's decision to suspend U.S. air strikes on Iran after nearly two weeks of escalating attacks. The Pentagon halted operations late Friday, and no strikes were reported over the weekend. Iran reciprocated, with a senior official telling Reuters on Sunday that Tehran would maintain its own pause "as long as the United States does the same."reuters+1

Oil prices fell sharply in response. Brent crude dropped more than 5% to around $91 a barrel on Monday, while U.S. West Texas Intermediate crude fell about 5.4%, according to Reuters. The Associated Press reported Brent falling 4.9% in early Sunday trading to $92.02 a barrel.927thevan+1

The de-escalation offered a reprieve from weeks of geopolitical anxiety that had pushed crude to a two-month high and weighed on speculative assets. Ethereum also advanced, with the second-largest cryptocurrency trading near the $1,900 level after rising from around $1,770 earlier in July.fortune+1

Fed Decision Looms as Next Catalyst

Market attention now shifts to the Federal Open Market Committee meeting beginning Tuesday, with a rate decision due Wednesday at 2 p.m. ET. The Fed is widely expected to hold its benchmark rate steady at 3.5% to 3.75% for a fifth consecutive meeting, though elevated oil prices have pushed the probability of a future rate hike higher.kucoin+1

CBS News reported the CME FedWatch tool shows a 38% likelihood of a hike at this week's meeting, up from 12% a week earlier, though most economists still expect no change. Gregory Daco, chief economist at EY-Parthenon, said the September meeting "could become the first meaningful test of whether the recent improvement in inflation proves durable."cbsnews

Fragile Calm

The diplomatic window remains narrow. The 60-day interim ceasefire deal signed in mid-June is now well into its second half, with core issues including Iran's nuclear program still unresolved, NPR reported. Regional mediators including Qatar, Oman, and Pakistan are working to facilitate indirect negotiations. Trump has warned that "full-scale war" could resume if Tehran fails to meet U.S. demands.npr+2

For crypto markets, the weekend's events recalled an April episode when a brief U.S.-Iran ceasefire sent Bitcoin surging past $72,000 as oil cratered. Whether the current relief holds may depend on whether diplomacy gains traction before military options return to the table.forbes