Bitcoin rallied to over $72,000 Wednesday morning after President Donald Trump announced a two-week conditional ceasefire with Iran, providing relief to markets roiled by weeks of escalating geopolitical tensions.
The leading cryptocurrency climbed to $72,379 in peak trading, extending gains from Tuesday’s announcement. Bitcoin was trading around $71,610 at press time, up 3.5% over the past 24 hours according to CoinGecko data.
The rally proved violent for leveraged traders. Short positions worth $425 million were liquidated as Bitcoin climbed, while long liquidations added another $170 million in forced exits, per CoinGlass data. Altcoins participated in the move, with Zcash, LayerZero, and Ethena posting double-digit gains.
What the Ceasefire Means
Trump announced the agreement based on conversations with Pakistani leadership, agreeing to “suspend the bombing and attack of Iran for a period of two weeks” provided Iran agrees to the “COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz.”
The ceasefire allows Iran and Oman to charge transit fees on ships passing through the strategic waterway, with proceeds directed toward reconstruction efforts. The Strait of Hormuz closure has been choking off roughly one-fifth of global oil supply since late February.
Oil prices responded sharply to the news, dropping over 22% from above $117 per barrel to $91. The move provided immediate relief after WTI crude had climbed above $115 and Brent crude surged past $110 earlier in the week amid escalating rhetoric.
Broader Market Response
The ceasefire announcement lifted equities across global markets. The S&P 500 jumped over 3.6% to $6,838, hovering below its $7,043 all-time high. Japan’s Nikkei and South Korea’s KOSPI indices posted similar gains.
The immediate catalyst for the relief trade was clear: the reopening of a critical shipping chokepoint reduces the likelihood of wider conflict and removes a significant supply shock from the global economy.
Fragile Breathing Room
Analysts cautioned that the ceasefire provides only temporary relief from a complex situation. “The pause provides fragile breathing room after weeks of escalation, but skepticism remains high over whether it will hold beyond two weeks,” said Andri Fauzan Adziima, research lead at cryptocurrency exchange Bitrue.
The deal leaves significant gaps unresolved. The ceasefire does not cover Lebanon, where Israeli air strikes have continued, potentially limiting its effectiveness as a full de-escalation.
Maksym Sakharov, co-founder and CEO of on-chain banking infrastructure provider WeFi, told Decrypt the ceasefire opens the hatch for better global crypto adoption—especially stablecoins—and a potential sharp market-wide rise.
Prediction Markets Signal Cautious Optimism
Sentiment shifted on prediction market Myriad following the announcement. Users now assign a 55% probability to Bitcoin rallying to $84,000 next, up from 43% before the ceasefire.
On the geopolitical side, traders placed an 88% chance that the average number of ships transiting the Strait of Hormuz will return above 15 before May, up from 65% the previous day.
Regulatory Progress Adds Support
The market relief extended to regulatory developments. The Federal Deposit Insurance Corporation approved proposed rules Monday implementing stablecoin requirements under the GENIUS Act, which President Trump signed into law last summer.
The new framework requires FDIC-supervised payment stablecoin issuers and banks engaging in stablecoin activities to maintain 1:1 backing with hard cash, alongside standards for reserve assets, redemption processes, capital requirements, and risk management.
Sakharov noted that stricter stablecoin regulations could increase adoption by eliminating concerns about reserve backing. “With stablecoins now requiring 1:1 backing with hard cash, there won’t be any excuses left for using stablecoins,” increasing trust in the ecosystem.
Macro Headwinds Remain
Despite the short-term rally, analysts warned that incoming economic data poses risks to further gains. U.S. CPI data is expected to show increases, potentially pushing back any Federal Reserve rate cuts or signals of economic growth.
Justin d’Anethan, head of research at crypto research firm Arctic Digital, told Decrypt that ETF inflows continue to provide support but remain “kept in check by a broader risk-off sentiment.”
The two-week ceasefire provides tactical relief, but Bitcoin’s path forward depends on whether the agreement holds and how macro data unfolds in the coming weeks. For now, all eyes remain on the Strait of Hormuz and what happens after the two-week window expires.
More Reads:
Bitcoin Whale Moves $20M to Binance as Market Faces Worst Quarter Since 2018
Biden-Era Crypto Policy Left Industry in Regulatory Limbo, Critics Say
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