Bitcoin Drops Below $80k As Iran Rejects U.S. Hormuz Deal

Bitcoin ($BTC) slid below $80,000 on May 7, dropping roughly 2% in 24 hours after fresh comments from Tehran hardened doubts over a near-term resolution to the U.S.-Iran conflict.

Iran Draws a Hard Line on Reparations

Speaking to Al Mayadeen, Mohsen Rezaei, former chief commander of the IRGC and a current member of Iran's Expediency Council, said Iran will not allow U.S. President Donald Trump to set out what he called an unrealistic plan for the Strait of Hormuz and simply exit the arena. He emphasized that Tehran must secure a satisfactory outcome from indirect negotiations with Washington and derive tangible benefits, and that the United States must pay reparations for all damage inflicted on Iran.

One Iranian official has suggested there has been $270 billion in direct and indirect damages within Iran, and said that the issue of compensation, including from Gulf states, had been raised with mediators. Iranian President Masoud Pezeshkian has also suggested that the payment of reparations is the "only way" to end the conflict.

The U.S. proposal on the table would lift sanctions and release billions of dollars in frozen Iranian assets, with both sides reopening the critical waterway within 30 days of signing. Iran has so far rejected that framework. The spokesperson for Iran's Ministry of Foreign Affairs said Tehran has yet to provide its response, while lawmaker Ebrahim Rezaei described the U.S. text as "more of an American wish list than a reality."

Why Hormuz Matters for Bitcoin

Among Iranian counter-actions since the conflict began is the closing of the Strait of Hormuz, a major global trade route for goods including fuel and gas. That closure has pushed energy prices higher and weighed on global risk appetite. The Federal Reserve has kept its target rate unchanged and explicitly linked elevated inflation to higher global energy prices, citing tensions in the Middle East as a source of uncertainty for the economic outlook.

If Iran closes the Strait of Hormuz further and Brent spikes toward $130, macro pressure could cause another crypto sell-off. The war has been weighing on Bitcoin since late February. The price of Bitcoin had not exceeded $80,000 since January 31 before the latest drop, as traders continue to monitor ceasefire negotiations for any sign of progress. With Iran's reparations demand now firmly on the record, a quick breakthrough looks increasingly unlikely, keeping downside risks in play for $BTC in the near term.

Sources:
Press TV: Iran will not allow U.S. to escape crisis without paying reparations
UK House of Commons Library: US-Iran ceasefire and nuclear talks in 2026
Al Jazeera: Trump says war will be over quickly as Iran reviews U.S. proposal