The overall crypto market cap rose 2.3% as traders hoped for de-escalation in the Middle East.
Crypto markets saw notable gains on Tuesday, with Bitcoin (BTC) leading the rally. On Tuesday, June 24, Bitcoin climbed 5.3%, rising back above $105,000. Altcoins performed even better, posting double-digit gains, with the total crypto market cap up 5.19%.
Ethereum (ETH) was among the strongest performers, up 11.33%. Altcoins also saw big gains, with XRP (XRP) up 10.15%, Solana (SOL) rising 9.61%, and Cardano (ADA) up 9.4%. Memecoins like Dogecoin and Shiba Inu also saw strong growth, nearing double digits.
The most likely catalyst for this rally was growing optimism that tensions in the Middle East are easing. On Tuesday, U.S. President Donald Trump announced a ceasefire between Iran and Israel be stricly respected on both sides.
The ceasefire came after U.S. bombers targeted Iran’s nuclear facilities, prompting a symbolic response from Iran via strikes on U.S. bases in Qatar. Iran reportedly gave ample warning, allowing U.S. personnel to evacuate and avoid escalation.
This development brought relief to traders, as a prolonged war, especially one involving the U.S., threatened to destabilize the global economy. In particular, heightened tensions had driven up oil prices, stoking fears of rising global inflation.
In particular, at one point, Iran threatened to close the Strait of Hormuz, through which about 20% of global oil production flows every day. In this environment, central banks are forced to raise interest rates, which hurts risk assets like crypto.
Where will Bitcoin and Ethereum go next?
The ceasefire between Iran and Israel is fragile, as seen by Israeli strikes on Iran soon after Trump announced the deal. Still, an irate response from Trump seems to have caused Israel to back down. In any case, the risk of further escalation is lower now than it was two weeks ago.
Traders, both retail and institutional, will now likely take a more risk-on approach. Future catalysts for growth include the GENIUS Act, which will bring the first regulatory framework for stablecoins to the U.S. Institutions will also likely continue to buy up Bitcoin for their treasuries.
