Bitcoin and Ethereum have remained near their recent highs as renewed talks between the United States and Iran have brought another proposal to reopen the Strait of Hormuz into focus, with lower oil prices potentially easing one of the pressures that has kept Treasury yields elevated.
Iranian Foreign Minister Abbas Araghchi said Thursday that Tehran had proposed a seven day plan to Washington under which hostilities would stop before the Strait of Hormuz reopened and comprehensive negotiations over Iran’s nuclear program began.
The proposal, delivered through intermediaries, calls for an end to hostilities including in Lebanon, the release of at least $12 billion in frozen Iranian assets, sanctions waivers for Iranian oil and the lifting of the U.S. naval blockade. Iran would reopen the strait at the end of the seventh day if those conditions were met.
Araghchi said Tehran was ready to start implementing the plan as soon as Washington agreed. An American official familiar with the discussions described talks through mediators as positive and constructive, but said Washington would not rush into an agreement.
Markets have already shown some sensitivity to the possibility of progress. WTI crude fell more than 2.5% to around $89 a barrel on Sept. 22 after Iran signaled that Hormuz could reopen within a week, while Brent dropped below $98. Bitcoin was trading close to $86,000 at the time.
Bitcoin has since settled near $84,000 after reaching $87,392 earlier in the week. Ethereum has held around the $2,600 area following its recent rejection near $2,800.
Bitcoin and Ethereum face high yields despite recent gains
Any agreement between Washington and Tehran would arrive while crypto traders are dealing with a difficult U.S. macro backdrop.
The Federal Reserve raised its benchmark rate by 25 basis points on Sept. 16 to a range of 3.75% to 4%, saying inflation remained elevated even as economic activity continued to expand at a solid pace.
Bond yields have continued climbing since the decision. The U.S. 10 year Treasury yield reached 5.11% on Sept. 24, up from 4.96% a day earlier, while the 30 year yield moved to 5.40%. The 10 year real yield climbed to 2.76%.
Rising oil prices have been part of that pressure. Brent moved above $100 earlier in September as fighting around Iran raised concerns over energy supplies, while the prospect of another Fed rate hike has kept borrowing costs in focus.
Crypto.news previously reported that Bitcoin held near $84,000 as the 10 year Treasury yield approached 5.2% during trading on Sept. 24. Oil prices were rising at the same time, while Fed officials kept another rate hike on the table.
Bitcoin has so far absorbed much of that pressure. U.S. spot Bitcoin ETFs recorded roughly $2.65 billion in net inflows over five sessions through Sept. 23, while wallets holding between 100 and 1,000 $BTC accumulated 113,950 $BTC from July 15 through Sept. 23.
The five day ETF inflow streak included $346.98 million on Sept. 23 after nearly $999 million on Sept. 21 and $714.7 million the following day.
Exchange balances have moved in the same direction. More than 13,800 $BTC left Binance on a net basis in one day, the largest daily outflow from the exchange since 2023, while Bitcoin remained above $84,000.
Ethereum has followed a similar recovery, though its latest rally stalled below $2,800. $ETH traded near $2,675 on Sept. 23 after reaching roughly $2,789, while U.S. spot Ethereum ETFs received $162.2 million on Sept. 22 and another $105 million the following session.
The token remained above its longer term four hour moving averages during the pullback, with Ethereum holding above its 50, 100 and 200 period averages even after losing the shorter 20 period average.
Why traders have heard Hormuz reopening plans before
The latest negotiations are not the first attempt this year to reopen the Strait of Hormuz.
Washington and Tehran reached a 14 point memorandum of understanding in June that declared an end to the war and provided for commercial vessels to resume using the waterway. Iran was expected to facilitate safe passage without charges for 60 days while the two countries worked toward a final agreement.
The arrangement soon began to break down.
Tehran interpreted the agreement as recognizing its authority to manage traffic through Hormuz, while Washington and Gulf states maintained that commercial vessels should have unrestricted passage without Iranian control.
By July, Iran had fired on vessels it said were using an unauthorized route and declared the strait closed again. Washington revoked a license allowing Iranian oil sales on July 7, while Tehran accused the United States of violating the memorandum. President Donald Trump subsequently described the initial ceasefire as over.
Attempts to restore traffic continued through the summer.
Iran said in August that it was preparing another set of conditions for reopening the strait after mediators approached Tehran. Officials discussed a shipping corridor with Oman, but Iran tied a full reopening to an end to the war, removal of sanctions, compensation and the lifting of what it described as a U.S. blockade.
Ceasefire arrangements announced in April and June had both been intended to restore maritime traffic but failed to hold, according to Reuters.
The latest proposal therefore resembles parts of the June arrangement but compresses the timetable. The earlier memorandum gave Washington and Tehran as long as 60 days to negotiate a final agreement. Araghchi’s new plan would reopen Hormuz after seven days and move directly into comprehensive nuclear negotiations.
What happens to Bitcoin and Ethereum if Hormuz reopens?
A lasting reopening could affect Bitcoin and Ethereum primarily through oil prices, inflation expectations and Treasury yields.
Before the war began in February, roughly one fifth of global oil and liquefied natural gas shipments passed through the Strait of Hormuz. Shipping through the waterway has remained heavily disrupted since then.
Restoring regular traffic would remove some of the supply uncertainty that has supported crude prices during the conflict. The initial market response to Iran’s Sept. 22 signal offered an early example, with WTI dropping more than 2.5% and Brent falling below $98.
Lower energy prices could, in turn, reduce one source of inflation pressure at a time when the Fed has returned to raising rates.
The relationship has already worked against crypto during periods of renewed fighting. On Sept. 2, Ethereum fell below $2,400 as fresh U.S. Iran strikes pushed Brent toward $95 and the 10 year Treasury yield above 4.8%. $ETH reached an intraday low of $2,356 during the session.
Conditions became more restrictive later in the month as oil moved above $100 and Treasury yields crossed 5%. Ethereum traded near $2,475 on Sept. 15 before recovering after the Fed decision and the subsequent crypto rally.
A sustained decline in oil following a Hormuz reopening would not guarantee lower interest rates. The Fed’s Sept. 16 statement said inflation remained elevated, while domestic spending, productivity and capital investment remained firm.
It could, however, remove part of the energy pressure that has complicated the inflation outlook. A decline in inflation expectations and Treasury yields would reduce the return available on government debt, changing one of the macro conditions that has recently worked against Bitcoin and Ethereum.
Bitcoin’s first major test would remain the $86,700 to $87,400 area, where the latest rally stalled. The previous range high near $82,000 has become an important level below the market, while the $80,000 area sits beneath it as the former upper boundary of Bitcoin’s earlier trading range.
A move back through $87,400 alongside falling oil and Treasury yields would put the January yearly open near $87,722 back into focus. Continued ETF demand would provide another source of spot buying after the recent five session inflow run.
Ethereum would first need to recover $2,700 before challenging the recent $2,789 high and resistance around $2,800. Its latest pullback left support around $2,648, followed by liquidity near $2,630 and the larger $2,532 to $2,550 area.
Another failed deal could keep oil and yields in focus
The opposite setup remains possible given the fate of previous agreements.
Iran’s seven day proposal requires Washington to lift its naval blockade, provide sanctions relief and release frozen Iranian assets before Hormuz is reopened. The United States has acknowledged constructive discussions through mediators but has not accepted those conditions.
A renewed breakdown in negotiations could leave shipping restrictions in place and restore some of the geopolitical premium recently removed from crude.
Bitcoin has already shown that higher yields can interrupt its rallies even when underlying spot demand remains firm. After reaching $87,392 on Sept. 21, $BTC retreated toward $84,000 as Treasury yields moved higher, despite consecutive ETF inflows and continued accumulation among larger wallets.
Ethereum faces a similar macro constraint after failing to hold its move toward $2,800. The nearest downside levels remain around $2,648 and $2,630, while a deeper decline would bring the $2,532 to $2,550 area back into view.
Araghchi said Iran was prepared to begin implementing the seven day plan once Washington agreed and suggested reaching an agreement before the U.S. midterm elections would be preferable. Mediated communication between the two sides continued after his meeting with U.S. envoy Steve Witkoff and Jared Kushner in New York, while Iranian officials said further meetings could take place in the coming days.