In a dramatic turn of events, risk markets surged on Monday after the United States and Iran announced an interim peace agreement, ending months of heightened tensions in the Middle East. The deal, which is set to be formally signed in Switzerland on June 19, includes the reopening of the Strait of Hormuz, a vital waterway for global oil transportation. As a result, crude oil prices tumbled over 5% to near $80 per barrel, while equities and cryptocurrencies rallied sharply.
Bitcoin, the largest cryptocurrency by market capitalization, briefly touched $67,100 in afternoon trading before settling above $66,000, marking a 4.5% gain over the previous 24 hours. The move was driven by a combination of short covering and renewed risk appetite, as traders interpreted the geopolitical détente as a catalyst for easing inflation pressures. Ether, XRP, and solana posted even stronger percentage gains, with solana advancing more than 10% and spurring a rally in related stocks such as Solmate and DeFi Development.
The broader stock market also benefited, with the Nasdaq Composite rising 2.5% by midday and the S&P 500 gaining 1.6%. Notably, SpaceX, which made its public debut on Friday in the largest initial public offering on record, continued its stellar performance. Shares of Elon Musk's aerospace company climbed an additional 8% on Monday, bringing its total post-IPO gain to approximately 40%. The rally was fueled further by underwriters exercising their greenshoe option, purchasing an additional 83.33 million shares and increasing total IPO proceeds to $85.7 billion.
ARK Invest, led by Cathie Wood, was a major buyer of SpaceX shares on its first day of trading, accumulating roughly 3.29 million shares worth over $500 million across multiple ARK ETFs. To fund the purchase, the firm sold shares in several other companies, including Advanced Micro Devices and Rocket Lab. This move highlighted the intense investor demand for SpaceX, which has established itself as a dominant player in space exploration and satellite internet.
In the cryptocurrency space, Strategy (formerly MicroStrategy) continued its aggressive bitcoin accumulation strategy. The company disclosed in a Monday filing that it had purchased an additional 1,587 bitcoins for approximately $100 million at an average price of $63,024. This brings its total holdings to 846,842 BTC, worth over $56 billion at current prices. The company also raised its cash reserve to $1.1 billion, funding both acquisitions through its at-the-market stock issuance program. Notably, this purchase followed Strategy's first bitcoin sale in four years on June 1, when it sold 32 coins to cover preferred dividends.
Meanwhile, IREN, a bitcoin mining and AI infrastructure company, announced the completion of its acquisition of Spain-based Nostrum Group. The deal adds roughly 490 megawatts of secured, grid-connected power capacity in Spain, along with a significant development pipeline and a team of over 50 specialists in engineering, construction, and operations. The acquisition marks IREN's entry into the European AI infrastructure market, positioning it to meet rising demand for AI cloud services. Co-CEO Daniel Roberts highlighted Spain's renewable energy resources and connectivity advantages, while Nostrum CEO Gabriel Nebreda expressed optimism about accelerating one of Europe's most advanced AI infrastructure pipelines.
Despite the broad rally, some analysts caution that the crypto market remains in a bearish phase. Paul Howard, senior director at trading firm Wincent, noted that the reduction in geopolitical risk provided a relief bounce but did little to change the broader outlook. In his view, three catalysts are needed for bitcoin to break out of its current range and reclaim its 200-day moving average near $77,000: a friendlier macro environment with lower interest rates, regulatory progress such as the Clarity Act and rules around onchain rewards for stablecoins, and continued adoption of crypto infrastructure through tokenized real-world assets, tokenized stocks, and stablecoins. Until then, Howard expects rallies to be difficult to sustain.
Derivatives data suggested that Monday's rally was driven primarily by a short squeeze rather than fresh bullish positioning. Open interest in bitcoin futures rose more than 4% to 748,000 BTC, while the funding rate remained negative at around -1%. This combination typically indicates that short traders are being forced to close their positions, accelerating the upward move. Coinbase CEO Brian Armstrong also weighed in, stating on X that he believes bitcoin has likely found a bottom near $60,000, though he cautioned that the market remains volatile.
Predictions markets offered a more tempered outlook. On Polymarket, over $15 million in volume has been placed on bitcoin's June price, with the most likely recovery point at $67,500 carrying 70% odds. A move to $72,500 had only 18% odds, and the $100,000 target for June sat below 1%. Kalshi's June market showed a 14% probability of bitcoin crossing $75,000 before June 30. For the year-end, Polymarket gave $100,000 only 19% odds, while Kalshi's December market had consensus near $66,000, with probabilities bunched in the $50,000 to $55,000 range.
The bigger story for crypto may be tied to central bank policy. The Federal Reserve's policy meeting is scheduled for Tuesday and Wednesday, the first chaired by new Fed Chairman Kevin Warsh. Markets do not expect a rate change this week but anticipate one or more hikes before year-end. A Wall Street Journal report suggested that Warsh is skeptical of the Fed's open communication policy, arguing that the central bank puts too much effort into projecting future interest rate paths. Any shift toward less forward guidance could introduce uncertainty, potentially benefiting safe-haven assets like gold and bitcoin.
Additionally, the Bank of Japan is set to announce its decision on Tuesday. A softer inflation backdrop due to lower oil prices could blunt any hawkish tilt that might revive the yen carry-trade risk, which has weighed on crypto in recent weeks. Traders will also be watching the energy market: a sustained drop in crude oil prices would ease inflation pressures and give central banks more room to maintain accommodative policies.
Commodity markets also reacted to the Iran deal. Copper climbed as much as 1.4% on expectations of improved trade flows and growth prospects. The industrial metal has gained about 4% since the war began in late February, while aluminum is up 13%. In contrast, bitcoin's relationship with geopolitical developments has been more capricious. Two previous ceasefires in April and early June fell apart, causing bitcoin to give back all its gains. Traders are now waiting for the formal signing in Switzerland before fully pricing in a lasting peace.
Cryptocurrency-related equities participated in the rally. Strategy shares rose 7.6%, Coinbase gained 6.8%, and Galaxy Digital added 5%. Bitcoin mining stocks such as TerraWulf and Cipher Mining advanced 4%, while IREN was up 5%. On the corporate front, Franklin Templeton proposed new ETFs that would convert corporate dividends into bitcoin, and Schwab announced plans to launch event-based options tied to the S&P 500, signalling growing institutional appetite for crypto-linked products.
Looking ahead, market participants will watch for further confirmation of the US-Iran agreement, developments around the Strait of Hormuz, and crude oil's next move. The Federal Reserve's stance on interest rates and the Bank of Japan's decision will be crucial in determining whether the current rally can sustain. For now, the combination of reduced geopolitical risk, a soaring SpaceX IPO, and continued corporate adoption of bitcoin has injected a fresh wave of optimism into markets, though long-term bears remain cautious about the underlying fundamentals.
Source: Coindesk News