The cryptocurrency market suffered a sharp selloff after U.S. President Donald Trump made fresh comments about the Strait of Hormuz, triggering renewed geopolitical concerns and sending oil prices higher. The uncertainty sparked a broad risk-off move, erasing more than $20 billion from the crypto market as Bitcoin and major altcoins declined.
With inflation data and Federal Reserve commentary due later this week, traders are now preparing for another period of heightened market volatility.
Trump’s comments shake global financial markets
Speaking on Monday, President Donald Trump said the United States was “taking over” the Strait of Hormuz, one of the world’s most important energy shipping routes. He added that countries using the waterway would have to compensate Washington for providing military protection.
Trump also claimed that negotiations with Iran had collapsed despite earlier signs of progress and warned that the U.S. had carried out fresh overnight strikes targeting Iranian military assets.
The renewed tensions quickly unsettled global markets, raising fears of a prolonged conflict in the Middle East and possible disruptions to global oil supplies.
Oil prices surge as geopolitical tensions intensify
Following Trump’s remarks, Brent crude oil climbed above $79 per barrel, gaining nearly 5% as investors priced in growing supply risks.
Iran also claimed it had closed the Strait of Hormuz, although U.S. Central Command rejected that assertion.
Because the Strait handles a significant portion of global oil shipments, any disruption to traffic through the region typically pushes energy prices higher and increases uncertainty across financial markets.
The latest developments prompted investors to reduce exposure to risk assets, including cryptocurrencies.
Bitcoin leads broad crypto market decline
Bitcoin dropped more than 3%, falling to around $62,389 after briefly touching an intraday low near $62,120. The cryptocurrency had traded as high as $64,340 during the previous 24 hours before sellers took control.
The weakness extended across the broader digital asset market.
Ethereum, XRP, BNB, Solana, Hyperliquid, Cardano, and several other major cryptocurrencies declined between 2% and 6% as investors reacted to rising geopolitical risks.
Overall, the crypto market lost more than $20 billion in value within hours.
Liquidations accelerate across crypto markets
The selloff also triggered a wave of leveraged position liquidations.
According to CoinGlass, nearly 73,000 traders were liquidated during the past 24 hours, with total liquidations exceeding $40 million.
The largest single liquidation reportedly occurred on Hyperliquid, where a position worth approximately $4.86 million was closed.
The spike in liquidations added further downward pressure as leveraged traders were forced to exit positions during the market decline.
Inflation data and Fed testimony become the next catalysts
Investor attention is now shifting toward key U.S. economic events scheduled for this week.
Markets are closely watching the upcoming Consumer Price Index (CPI) inflation report, along with testimony from Federal Reserve Chair Kevin Warsh, for fresh clues about future interest-rate policy.
Any indication that inflation remains elevated could reduce expectations for rate cuts and place additional pressure on risk assets, including cryptocurrencies.
Crypto market remains highly sensitive to macro events
The latest selloff highlights how quickly geopolitical developments can impact digital asset markets.
While long-term adoption trends remain intact, Bitcoin and other cryptocurrencies continue to trade like risk-sensitive assets during periods of global uncertainty.
Until geopolitical tensions ease and investors receive greater clarity on U.S. monetary policy, crypto markets are likely to remain volatile, with traders closely monitoring both macroeconomic data and developments in the Middle East.
