The US and Iran have approved a 60-day "roadmap": how will this affect Bitcoin
The first round of high-level direct negotiations between the United States and Iran has concluded in Switzerland. With Qatar and Pakistan acting as mediators, the parties approved a detailed plan to prepare a final agreement within 60 days. This process is based on a bilateral memorandum signed earlier in Islamabad.
According to the final statement, a High Committee is being established for political oversight of the negotiations. Specialized working groups will address the nuclear program, the lifting of economic sanctions, and the resolution of contentious issues.
A key point was the commitment to open communication lines to prevent incidents in the Strait of Hormuz and ensure the safety of commercial shipping. To monitor the cessation of military operations in Lebanon, a joint de-escalation cell is being created with the participation of the US, Iran, and Lebanon. Technical consultations in Bürgenstock continue through the end of the week.
Market Reaction: Oil Falls, Dow Jones Makes History
News from Switzerland has noticeably calmed investors ahead of the new week. As early as Sunday, there were rumors of a possible breakdown in negotiations by Tehran, which frightened traders with the prospect of a collapse in commodity and cryptocurrency markets.
All attention is now focused on commodity prices. The protection of the Strait of Hormuz is the main factor for investors. This is the news that exchanges will begin to price in first. After the publication of the memorandum, the following changes were recorded:
- Oil quotes plunged by more than 12%.
- The Dow Jones Industrial Average updated its historical high.
The creation of a permanent security mechanism in the strait will continue to put pressure on the price of crude oil. Following commodities, stock markets will begin to rise: cheap energy resources reduce inflationary pressure and increase corporate profits.
What Awaits Bitcoin?
The cryptocurrency market is reacting in a similar way. Bitcoin has traditionally followed the overall investor risk sentiment throughout the geopolitical crisis. The cryptocurrency rose during periods of warming relations and fell sharply during escalations.
By Monday morning, BTC had stabilized at the $64,200 mark. The main limitation for further growth is the position of the US Federal Reserve System. The Fed's hawkish rhetoric on June 17 erased part of the gains in stocks and cryptocurrencies following the signing of the memorandum.
Additionally, it is worth monitoring the trilateral group on Lebanon. Iranian authorities have called this initiative a key indicator of the sincerity of intentions. Any breakdown of the ceasefire in the region will force investors to massively sell off risky assets.
My analysis: While the geopolitical backdrop is improving, Bitcoin is receiving support from falling oil prices and rising stock indices. However, without a softening of the Fed's monetary policy, a sustained bullish trend is unlikely. Investors should closely monitor developments in Lebanon — any negative news could instantly negate the positive sentiment from the negotiations.