Bitcoin briefly dipped before surging over $82,000 on Sunday after President Trump rejected Iran's peace counteroffer, prolonging Middle East tensions.
Trump posted on Truth Social that the proposal was 'TOTALLY UNACCEPTABLE.' Iran had requested war reparations and the unfreezing of its assets.
Bitcoin fell from $81,430 to $80,520 within 45 minutes of Trump's post, then whipsawed nearly 2.3% to $82,347. The rally liquidated nearly $64 million in short positions.
Oil prices rose another 4.6% to $98.7 per barrel. The Strait of Hormuz, which handles one-fifth of global oil trade, remains a flashpoint.
The S&P 500 futures index rose 0.13% after market open.
Trump's rejection dashes hopes for an imminent end to the war. Israeli PM Netanyahu says the war won't be over until Iran's uranium sites are dismantled.
Two U.S. Senate decisions this week could further boost Bitcoin: Kevin Warsh's confirmation as Fed Chair and the markup on the CLARITY Act. Analysts say both lean bullish, offering regulatory clarity and removing policy uncertainty.
Bitcoin is up 29.7% since the US-Iran conflict began on February 28, outperforming the S&P 500 and gold.