Cryptocurrency markets fell sharply on Monday morning following the breakdown of negotiations between the United States and Iran over the Strait of Hormuz. President Trump threatened renewed airstrikes, sending oil prices up 7% and creating broad market anxiety. Key U.S. inflation data due this week will be closely watched by investors as rising energy costs pressure the Federal Reserve.
Cryptocurrency markets declined in Asian trading on Monday as investors reacted to failed Middle East negotiations. The breakdown prompted concerns over renewed military action and a blockade of the Strait of Hormuz.
President Trump stated on Truth Social that Iran’s failure to open the strait “caused anxiety, dislocation, and pain.” He further threatened that the U.S. military is “fully ‘LOCKED AND LOADED'” to finish the conflict.
Oil prices surged 7% to around $104 per barrel following the reports. This resurgence in energy costs has reintroduced inflationary pressures to the global economy.
The key economic report this week will be March’s Producer Price Index inflation data, released on Tuesday. Additional data includes the Philly Fed Manufacturing Index and Initial Jobless Claims on Thursday.
Market analysts noted that all eyes are on the market reaction to the weekend’s events. There are also ten Federal Reserve speaker events scheduled this week.
Total crypto market capitalization dropped around $70 billion over the weekend to below $2.5 trillion. Bitcoin fell to $70,500 before a partial recovery, while Ethereum dropped more than 3% below $2,200.
