The peace memorandum between the US and Iran failed to counter the Federal Reserve's pressure on Bitcoin.
The signing of a historic peace memorandum between Washington and Tehran sparked a short-term wave of optimism in the markets, but Bitcoin failed to hold onto its gains. The leading cryptocurrency once again came under pressure from the hawkish rhetoric of the Federal Reserve, losing 2.80% over the past 24 hours and trading near the $63,800 mark.
Donald Trump signed the document, which includes 14 key points aimed at ending hostilities and stabilizing the situation in the region. The agreement provides for the launch of verification mechanisms, a partial lifting of sanctions, and a clear timeline for technical negotiations on Tehran's nuclear program. Pakistan, Qatar, Saudi Arabia, and Turkey played a mediating role.
Immediately after the news was announced, Bitcoin jumped to $66,315 — the geopolitical détente gave a boost to risky assets. Oil and gold, on the other hand, moved into negative territory as the geopolitical premium instantly evaporated. However, investor joy was short-lived.
The Fed's tough stance overshadowed geopolitical positivity
On June 17, the new Fed Chairman Kevin Warsh held his first Federal Open Market Committee meeting. As a result, the regulator left the key interest rate unchanged at 3.50–3.75% for the fourth consecutive time, but more importantly, any hints of possible policy easing disappeared from the official statement. Moreover, 9 out of 18 Committee members now forecast at least one rate hike in 2026 — a stark contrast to previous market expectations, which had anticipated a cut or a prolonged pause.
The hawkish rhetoric confirms analysts' warnings about growing risks of a rate hike in September. Rising wages, sustained consumer activity, and record investments in AI are keeping inflation at around 4.2% annually — significantly above the Fed's 2% target.
Markets reacted immediately: the S&P 500 fell by 1.5%, the Nasdaq lost 2%, and the Dow Jones dropped by 160 points. The yield on two-year Treasury bonds jumped by 11 basis points to 4.153%, and the ten-year yield rose by 12 points to 4.469%.
The cryptocurrency sector fully mirrored the movement of traditional markets, which saw a massive investor flight from risky instruments. Bitcoin could not withstand the pressure from the Fed — not even the positive geopolitical backdrop helped. At the time of writing this review, the market flagship is trading 4% below its weekly high of $67,203.
My expert opinion: The current situation clearly illustrates a key principle for all crypto investors — major geopolitical events can only provide short-term support for the price. In the medium and long term, the trajectory of Bitcoin and other risky assets continues to be shaped by the dominant influence of central bank monetary policy. As long as the Fed maintains a hawkish stance, any geopolitical positivity will only be a temporary respite before a new wave of pressure.