Monday’s trade truce lasted about 18 hours.
Bitcoin was up 3.1% at $70,352 on Tuesday morning, recovering from a weekend slide below $68,000, with ethereum (ETH), Solana’s SOL, dogecoin and XRP rising between 2-4%.
The Wall Street Journal reported on Tuesday that Saudi Arabia has agreed to allow U.S. forces access to King Fahd Air Base, reversing its previous position that the base could not be used to attack Iran. The United Arab Emirates has taken similar measures.
Direct entry of Gulf states into the war would shift the conflict from U.S.-Israeli action to a broader regional alliance, a significant escalation from what markets had previously expected.
Iran’s deputy speaker of parliament ruled out talks with the United States, echoing a denial late Monday night by the Fars news agency. The Strait of Hormuz remains effectively closed, with only a handful of ships passing through.
Traditional markets reacted immediately. S&P 500 futures fell 0.5%. European stocks opened down 0.8%. Brent crude oil prices rose 4% to around $104. The dollar strengthened 0.3%. Gold prices fell 1.5%, extending their longest daily decline on record.
Gold’s plunge remains the most confusing signal for global markets. In a fierce and expanding war, safe-haven assets plunged into a record losing streak that defied all historical precedent.
The most likely explanation is that other funds facing margin calls for their positions were forced to sell, with gold being the most liquid asset. But whatever the reason, it makes Bitcoin’s relative stability all the more remarkable. Coins that are supposed to be volatile stay within a certain range, while coins that are supposed to be stable are in free fall.
The five-day window Trump gave Iran was set to expire on Saturday, but Saudi Arabia’s entry completely changed the situation. The regional coalition fighting Iran is a different war than U.S. and Israeli airstrikes, and it puts oil infrastructure on both sides of the Gulf at risk.
Bitcoin prices were holding at $70,000 on Tuesday morning, while everything else was deteriorating. Whether this is resilience or the market waiting for the next headline to react, this is a question that will be answered throughout the rest of the week.