Bitcoin dips alongside the wider crypto complex as oil climbs sharply on growing U.S.-Iran conflict concerns.

Bitcoin retreated toward $66,700 on Monday as traditional financial markets reopened and reacted to the weekend’s military escalation between the U.S. and Iran. Oil spiked to $77 while Asian equities slid 1.4%, reflecting the broader risk-off tone.

The largest cryptocurrency slipped to $66,702 in early trading, down 1.1% over 24 hours, as global markets began pricing geopolitical developments that crypto had been digesting largely on its own since Saturday. Sunday’s rebound to $68,000 following confirmation from Iran’s Supreme Leader, Ali Khamenei, has mostly faded, with prices returning to the mid-$66,000 range seen before the strikes.

Altcoins showed mixed performance. Ether declined 2.5% to $1,967, solana dropped 4.1% to $84, and XRP fell 3.6% to $1.36. On a weekly basis, losses are more pronounced, with solana down 8.1%, the steepest drop among major tokens.

Traditional markets moved sharply. Brent crude initially surged as much as 13% at the open before paring gains to trade around $77.50, still up 6.4% — its largest jump since Russia’s 2022 invasion of Ukraine. According to Bloomberg, the Strait of Hormuz — a critical chokepoint that carries roughly 20% of global oil supply — is effectively closed. Asian stocks fell 1.4%, U.S. equity futures dropped 0.7%, and gold climbed to $5,350 an ounce.

Energy prices are central to crypto’s near-term trajectory. Higher oil costs feed into inflation expectations, potentially delaying Federal Reserve rate cuts and tightening liquidity conditions that typically underpin risk assets like digital tokens.

The geopolitical backdrop remains uncertain. The Wall Street Journal reported that Iran is exploring renewed nuclear negotiations with Washington, while Iran’s national security chief, Ali Larijani, said the country would not negotiate. On Sunday, U.S. President Donald Trump said military operations would continue until objectives are met, though The Atlantic reported he has agreed to hold talks with Iran’s new leadership.

Despite the volatility, some market participants see limited downside for crypto. Jeff Mei, chief operating officer at BTSE, argued that Iran’s long-standing isolation from global financial markets may cushion broader contagion effects. Concerns over oil-driven inflation, he added, could be offset by alternative supply from OPEC and the U.S., potentially stabilizing energy prices.

Ultimately, the path forward hinges on whether the Strait of Hormuz reopens and how prolonged the military campaign becomes. Until greater clarity emerges, crypto is likely to trade in line with broader risk sentiment in an increasingly fragile global environment.