Oil prices took a nosedive on Monday as U.S. President Donald Trump suggested that the conflict with Iran might be nearing its end, only to escalate his rhetoric the following day on social media. This rollercoaster of statements has left markets in a state of confusion and volatility.
In a phone interview with CBS News, Trump stated, “I think the war is very complete, pretty much. If you look, they have nothing left. There’s nothing left in a military sense.” These comments sent oil prices plummeting 28% from their four-year high of $118 to around $85 within hours, according to OilPrice.
Market Reactions and Expert Insights
However, the market’s relief was short-lived. On Tuesday, Trump posted on Truth Social, a conservative social media platform, that if Iran interferes with oil flow through the Strait of Hormuz, they will face an unprecedented attack. “If Iran does anything that stops the flow of oil within the Strait of Hormuz, they will be hit by the United States of America TWENTY TIMES HARDER than they have been hit thus far,” he wrote.
“Additionally, we will take out easily destroyable targets that will make it virtually impossible for Iran to ever be built back, as a Nation, again,” Trump added, with a caveat: “Death, Fire, and Fury will reign upon them — But I hope, and pray, that it does not happen!”
Augustine Fan, partner and head of insights at SignalPlus, a crypto trading software service provider, told Cointelegraph that it’s difficult to take these statements at face value. “Other members of his cabinet are stating that things are still in the beginning phase, and U.S. military assets are still deployed in the region,” Fan noted.
Crypto Markets React to Geopolitical Uncertainty
The crypto market, often seen as a safe haven during times of geopolitical turmoil, saw a modest 3.1% gain over the past 24 hours. Bitcoin (BTC) reclaimed the $70,000 mark, while Ether (ETH) hovered just above $2,000 at the time of writing. The mixed signals from Trump have left investors cautious but optimistic.
Andri Fauzan Adziima, research lead at Bitrue, told Cointelegraph that if Trump’s claim of the war’s end proves accurate, a strong relief rally in crypto could be on the horizon. “Driven by plunging oil prices, eased inflation/geopolitical fears, and renewed risk appetite, the crypto market could see a significant boost,” he said. However, he added that doubts persist due to mixed signals from Iran and the potential for prolonged uncertainty.
Iran’s Response and Market Outlook
The Iranian Revolutionary Guard responded to Trump’s statements, dismissing them as “nonsense” and asserting that they will determine the end of the war. This defiant stance adds another layer of complexity to the already volatile situation.
Fan emphasized that the conflict is unlikely to be resolved soon. “We don’t expect the conflict to be resolved any time soon. We would expect tradable bounces and BTC to do relatively better as a potential store of value during these times,” he said.
As the geopolitical landscape continues to shift, the crypto and oil markets remain closely intertwined. Investors are advised to stay vigilant and prepared for further fluctuations in the coming days.
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