CoinDesk
Bitcoin held below $73,000 on Friday, unable to catch a bid even as U.S. stocks, bonds, and crude oil rallied on an Axios report that U.S. and Iranian negotiators had reached a draft 60-day memorandum of understanding to extend the ceasefire and begin nuclear talks. The macro backdrop turned hostile at the same moment: the Personal Consumption Expenditures index, the Fed's preferred inflation gauge, climbed to 3.8% year over year under new Chair Kevin Warsh, the highest reading in nearly three years and a sharp jump from 2.8% in February. Treasury Secretary Scott Bessent separately warned that the U.S. would "not tolerate" any tolls on shipping through the Strait of Hormuz, pledging aggressive sanctions on any party facilitating transit fees.
Why it matters
Crypto is decoupling from the broader risk-on reaction in a way that speaks to positioning rather than flow. Equities and oil traders are leaning into a potential de-escalation of the Middle East conflict that has dominated macro trades for months, but bitcoin and gold are both selling off — a pattern JPMorgan attributes to investors unwinding the pandemic-era debasement trade that had centered on the two assets as macro hedges. The bank points to recent outflows from bitcoin and gold ETFs and shrinking institutional futures positions as evidence the hedge bid is cooling ahead of any actual peace settlement. With PCE now printing at a nearly three-year high, the disinflation thesis that underpinned much of the 2024–2025 crypto rally is also back under question.
Market impact
The tape looks heavy across both spot and derivatives. Bitcoin's failure to respond to a positive risk-on signal from TradFi is the tell: traders are not treating peace headlines as bullish for crypto, and JPMorgan's framing implies the unwind has further to run if a deal actually lands. Olu Sonola, head of U.S. economics at Fitch Ratings, called the PCE print "increasingly uncomfortable for the Fed" and warned that core inflation is moving the wrong way, suggesting rate-cut optionality is being priced out at exactly the moment crypto needs liquidity tailwinds.
Frequently asked questions
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Why is Bitcoin not rallying on the U.S.-Iran peace headlines?
JPMorgan says the pandemic-era debasement trade is unwinding, with outflows from bitcoin and gold ETFs and shrinking institutional futures positions suggesting investors are getting ahead of an actual peace settlement rather than treating the headlines as bullish.
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What did the latest PCE inflation report show?
The Personal Consumption Expenditures index, the Fed's preferred gauge, rose to 3.8% year over year in April — the highest in nearly three years and a sharp jump from 2.8% in February, according to the first inflation report under Chair Kevin Warsh.
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What did Treasury Secretary Scott Bessent say about the Strait of Hormuz?
Bessent warned the U.S. would 'not tolerate' any tolls on shipping through the Strait of Hormuz, pledging aggressive sanctions on any party — including Oman — that facilitates transit fees through the key waterway.
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What did the Fitch economist say about the PCE print?
Olu Sonola, head of U.S. economics at Fitch Ratings, called the inflation picture 'increasingly uncomfortable for the Fed' and warned that core inflation is moving the wrong way, with price pressures likely to persist over the next few months.
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What are the next catalysts for Bitcoin's price action?
The Fed's response to the 3.8% PCE surprise, the status of the draft U.S.-Iran ceasefire memorandum, and any escalation tied to Bessent's Strait of Hormuz warning are the key inflection points traders are watching.
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