US strikes Iran as Bitcoin slides below $77,000 on geopolitical risk

The Pentagon said it shot down four Iranian drones and struck a base preparing to launch a fifth on Wednesday, the second such operation this week, as Bitcoin slid below $77,000 on escalating geopolitical risk.

"These were purely defensive actions to protect freedom of navigation in the Strait of Hormuz," a Pentagon official said, speaking on condition of anonymity to discuss sensitive operations.

The strait handles about 21% of global oil trade, and the three-month conflict has already pushed crude benchmarks higher while rattling risk assets. Bitcoin fell as low as $76,800, extending losses as traders rotated out of speculative positions after the escalation.

President Donald Trump said Iran is "negotiating on fumes" and expressed confidence a deal is near, though the latest strikes complicate talks. With midterm elections five months away, rising fuel prices and market volatility are darkening the economic mood — and any settlement that leaves Iran's nuclear capability intact risks criticism from Trump's own supporters.

The first U.S. strike on May 25 targeted missile launch sites and minelaying boats in southern Iran, which the Pentagon described as a measured response to weeks of relative calm. Iran condemned the action as a sign of "bad faith and unreliability," according to state media. Tehran has said a draft agreement with Washington would reopen Hormuz shipping and end the naval blockade, though no formal deal has been announced.

The last time U.S. forces conducted sustained operations in the Persian Gulf region was during the 2019-2020 tanker crisis, when oil prices spiked as much as 15% in the weeks after the Soleimani strike before retreating. This time, the conflict has dragged on for nearly three months, with crude benchmarks holding elevated levels and the risk premium embedded in options markets widening.

For crypto markets, the geopolitical shock compounds existing headwinds. Bitcoin's drop below $77,000 marks a fresh low for the month, with open interest declining as leveraged positions unwind. The broader risk-off move mirrors weakness in equities, with the S&P 500 falling as traders priced in a higher probability of prolonged instability in the Middle East.

Trump acknowledged there is still work to do on a deal but said the two sides would get there. "They want very much to make a deal," he said at a Cabinet meeting Wednesday. "So far, they haven't gotten there. We're not satisfied with it, but we will be — either that or we'll have to just finish the job."

This article is for informational purposes only and does not constitute investment advice.