Bitcoin traded near $63,800 on Monday as most traditional assets came under pressure following the fourth round of US strikes on Iran in a week.

The world's largest cryptocurrency slipped around 0.3% over the past 24 hours but remained about 2% higher on a weekly basis.

Traditional markets decline

Global markets recorded sharp moves as geopolitical tensions escalated.

• Spot gold fell as much as 1.6% to around $4,050 an ounce.

• Brent crude surged about 4% to above $79 a barrel amid conflicting reports over the status of the Strait of Hormuz and fears of supply disruptions.

• US Treasury prices declined, pushing the two-year yield to its highest level since February 2025.

• The MSCI Asia-Pacific Index fell 1.6%.

US Central Command said American forces had struck targets inside Iran in response to an attack on a container ship. Meanwhile, the status of the Strait of Hormuz remained unclear after Washington rejected Tehran's announcement that the waterway had been closed "until further notice."

Around 20% of global seaborne oil trade passes through the strait.

Markets bet on interest rates remaining higher

Investors believe a broader conflict could keep oil prices elevated, potentially forcing the Federal Reserve to maintain higher interest rates for longer.

Minutes from the Fed's June meeting also showed that some policymakers saw a case for raising interest rates before the committee ultimately decided to leave them unchanged.

Higher interest rate expectations weighed on non-yielding gold and also pressured bond prices.

Cryptocurrency market shows greater stability

In contrast, the cryptocurrency market remained relatively resilient.

• Ethereum traded near $1,800, up around 2% over the week.

• Solana fell to roughly $76, down 5% over seven days and ranking as the weakest performer among major cryptocurrencies.

• XRP held near $1.09.

• Dogecoin traded close to $0.07.

Impact of semiconductor stocks

The report noted that the clearest link between cryptocurrency and equity markets came through the semiconductor sector.

SK Hynix shares plunged 12% in Seoul following a strong rally in the company's Nasdaq-listed shares during their first trading session on Friday.

The decline contributed to a roughly 7% drop in South Korea's Kospi index, although the cryptocurrency market remained broadly stable despite the volatility.

Bitcoin shrugs off geopolitical developments

The report said Bitcoin's ability to remain within a narrow trading range despite military strikes, weakness across most risk-sensitive assets, and the repricing of US monetary policy expectations marked a notable change from previous years, when the cryptocurrency reacted sharply to any escalation in the Gulf region.

According to the report, Bitcoin's performance is now more closely tied to US dollar liquidity and the semiconductor cycle, while oil, gold, and bond markets are absorbing the more immediate impact of geopolitical developments.

Oil prices climbed more than 2% on Monday after renewed military strikes between the United States and Iran revived concerns over disruptions to energy shipments through the Strait of Hormuz, one of the world's most critical oil export routes.

Brent crude futures rose $1.67, or 2.2%, to $77.68 a barrel by 09:55 GMT, while US West Texas Intermediate (WTI) crude gained $1.59, or 2.23%, to $73.00 a barrel.

"The market's focus will remain on the number of oil tankers heading into the region because a decline could eventually affect production," said Giovanni Staunovo, commodity analyst at UBS. "That is why we continue to see a geopolitical risk premium supporting prices, alongside the risk of supply disruptions."

Fresh military escalation heightens supply concerns

Military exchanges between the United States and Iran over the weekend intensified fears of a broader escalation in the region.

Tehran announced that it had targeted US facilities across several Gulf states on Sunday and reaffirmed the closure of the Strait of Hormuz. On Monday, Iran's Revolutionary Guard said it had carried out attacks on US military bases in Kuwait and Bahrain.

Before the outbreak of the war in late February, around 20% of the world's daily oil and liquefied natural gas supplies passed through the Strait of Hormuz.

Shipping traffic slows

ANZ analysts said shipping companies are exercising greater caution in response to the deteriorating security situation, leading to slower traffic through the waterway.

Ship-tracking data showed that traffic through the Strait of Hormuz fell on Sunday to its lowest level in five weeks, with only six vessels passing through the strait, according to data from Kpler.

The latest escalation has also cast doubt over the future of the temporary agreement between the United States and Iran, signed last month to reopen the strait and end the conflict following an additional 60-day negotiation period.

Although Iran announced the closure of the strait after a vessel was reportedly targeted for sailing through an unauthorized route, US President Donald Trump insisted that the Strait of Hormuz remains open to commercial shipping.

Goldman Sachs: Pipeline expansion could reduce risks

Goldman Sachs estimates that the expansion of pipeline infrastructure across the Middle East could allow more than 60% of Gulf oil exports that previously relied on the Strait of Hormuz before the war to bypass the waterway by the end of 2028.

The bank expects alternative pipeline capacity to increase by 3.8 million barrels per day by the end of 2027, followed by an additional 7.3 million barrels per day by the end of 2028, lifting total bypass capacity to more than 14 million barrels per day.

Other market developments

• Floating storage of Iranian crude increased after Tehran boosted exports during the temporary ceasefire with the United States. However, sales have since slowed as independent Chinese refiners shifted toward cheaper crude supplies from Iraq, the UAE, and Qatar.

• Abu Dhabi National Oil Company (ADNOC) set the official selling price for August Murban crude at $80.01 a barrel, compared with $101.48 for the previous month.

• In a separate development, Ukraine's Security Service announced an attack on an oil storage facility in Russia's Stavropol region, as well as three oil storage tanks at the Port of Kavkaz in Russia's southern Krasnodar region.

Silver prices fell more than 3.5% in European trading on Monday, opening the week on a sharply negative note and extending losses for a second consecutive session. The decline was driven by a stronger US dollar and a sharp rise in oil prices after the United States and Iran exchanged military strikes over control of the Strait of Hormuz.

Markets are closely watching this week's release of key US inflation data for June, along with Federal Reserve Chair Kevin Warsh's testimony before Congress, for further clues on the outlook for US interest rates.

The Price

• Silver prices fell 3.65% to $57.71 an ounce, from the opening level of $59.89, which also marked the session high.

• At Friday's settlement, silver lost 0.1%, posting its fourth decline in the past five sessions as the stronger US dollar weighed on prices.

• The white metal fell 4% last week, marking its third weekly loss in the past month amid renewed tensions in the Middle East and rising expectations of higher US interest rates.

US dollar

The dollar index rose 0.25% on Monday, extending gains for a second consecutive session and reflecting continued strength in the US currency against a basket of global currencies.

Safe-haven demand for the dollar returned as military tensions between the United States and Iran escalated over control of the Strait of Hormuz, threatening to derail the framework agreement and reignite direct confrontation between the two sides.

Global oil prices

Oil prices surged more than 4% on Monday and were on track to reach their highest level in several weeks after Iran announced the closure of the Strait of Hormuz, fueling concerns over supply disruptions from the Gulf region.

The sharp rise in global oil prices has renewed fears of accelerating inflation, increasing the likelihood that central banks will raise interest rates in the near term, marking a sharp shift from pre-war expectations for rate cuts or an extended period of unchanged policy.

Latest developments in the Iran conflict

• US Central Command (CENTCOM) launched a third intensive wave of airstrikes along Iran's coastline.

• The US strikes followed attacks by Iran's Revolutionary Guard Navy on commercial vessels in the Strait of Hormuz.

• Iran expanded its military operations against Gulf states following the US strikes and announced the closure of the Strait of Hormuz.

• President Donald Trump said the Strait of Hormuz was "open and will remain open" through military force, while the US Treasury revoked temporary licenses allowing Iranian oil sales.

• Iran's Foreign Ministry said Washington had undermined diplomatic efforts and violated the terms of the framework agreement.

• Iranian Parliament Speaker Mohammad Bagher Ghalibaf declared that the era of "unequal agreements" was over and that Washington would pay the price.

US interest rates

• Amid rising oil prices, CME Group's FedWatch tool showed that the probability of the Federal Reserve leaving interest rates unchanged at its July meeting fell from 78% to 68%, while the probability of a 25-basis-point rate hike increased from 22% to 32%.

• Markets are currently pricing a 24% probability that the Federal Reserve will leave rates unchanged at its December meeting, while the probability of a 25-basis-point hike stands at 76%.

• Investors are closely monitoring incoming US economic data and comments from Federal Reserve officials to reassess those expectations.

• June US inflation data will be released on Tuesday and is expected to play a key role in shaping the outlook for US interest rates.

• Markets will also closely follow Federal Reserve Chair Kevin Warsh's first semiannual testimony before Congress on Tuesday and Wednesday.

The US dollar traded in volatile fashion on Monday after surrendering its early gains, as investors focused on renewed military clashes in the Gulf region. Meanwhile, the Japanese yen weakened following a report indicating that Japan has no immediate plans to alter the asset allocation of its government pension funds.

The dollar initially strengthened alongside higher oil prices before losing momentum later in the session. The euro rose 0.15% to $1.1433, sterling was little changed at $1.339, while the Australian dollar slipped 0.1% to $0.694.

Renewed Gulf tensions lift oil prices

The weekend saw an intense exchange of missile and drone attacks between the United States and Iran. Tehran targeted US facilities in several Gulf countries on Sunday and once again announced the closure of the Strait of Hormuz, one of the world's most important oil shipping routes.

The developments pushed oil prices higher, with Brent crude rising about 3% to $78.50 a barrel.

In currency markets, the US dollar index, which measures the greenback against a basket of six major currencies, climbed as much as 0.3% during the session before reversing course to trade down 0.2% at 100.83.

"The dollar was the biggest beneficiary of the previous conflict, but this time it is starting from a much stronger level, and markets have already repriced their expectations for Federal Reserve policy," said Thomas Mathews, Head of Markets for Asia-Pacific at Capital Economics.

"So it is not clear that the dollar will enjoy the same gains if the situation continues to deteriorate, and that already appears to be reflected in today's price action," he added.

Markets increase bets on US rate hikes

Federal funds futures showed that markets are pricing roughly a 50% probability that the Federal Reserve will raise interest rates two or more times by its December meeting, up slightly from Friday, according to CME Group's FedWatch tool.

This week's focus will be on:

• US Consumer Price Index (CPI) data due on Tuesday.

• US Producer Price Index (PPI) data scheduled for Wednesday.

• Testimony by Federal Reserve Chair Kevin Warsh before both the House of Representatives and the Senate, which could provide fresh signals on the future direction of monetary policy.

Yen weakens again

The Japanese yen declined against the US dollar after a report indicated that the Japanese government has no immediate plans to revise the asset allocation of government pension funds.

The dollar rose 0.2% to ¥162.05, reviving concerns that Japanese authorities could intervene in the foreign exchange market as the yen continues to trade near its weakest level in almost 40 years.

The yen and Japanese government bonds had rallied on Friday after Finance Minister Satsuki Katayama said the government would explore ways to encourage pension funds, including the Government Pension Investment Fund (GPIF), to increase investments in domestic financial assets.

However, two government sources told Reuters that the administration is only seeking to encourage investment within the current asset allocation framework, with no immediate plans to revise the fund's medium-term allocation targets.

Chris Turner, Global Head of Markets at ING, said the possibility of Japanese intervention in the currency market remains on the table this week, but noted that "intervention alone cannot reverse the dollar's current upward trend."

He added that reversing the trend would require lower energy prices as well as greater confidence that the Federal Reserve no longer needs to continue raising interest rates.