Bitcoin holds near $63,800 despite market turmoil triggered by military escalation

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.