Bitcoin briefly dipped on Sunday after President Trump rejected Iran's peace proposal, then recovered above $82,000 before easing near $81,034. Trump called Iran's counteroffer 'TOTALLY UNACCEPTABLE'; Iran had sought war reparations, unfreezing of assets, and recognition of sovereignty over the Strait of Hormuz. The jolt reminds traders that a prolonged oil shock can keep inflation sticky, delay Federal Reserve rate cuts, and pressure speculative assets like Bitcoin.
Trump nixes Iran deal
Trump rejected Iran's offer over the weekend, labeling it a non-starter. Iran's demands included financial reparations and control over the Strait of Hormuz, a key chokepoint for global oil shipments. Markets reacted instantly: Bitcoin slid, then clawed back ground. The underlying worry is that any sustained spike in crude prices would feed into already-elevated inflation, making it harder for the Fed to ease policy. Bitcoin has held near $80,000, while options data, fund flows, and Washington's crypto calendar suggest traders may be underestimating risk of an upside squeeze, according to market observers.
CPI test ahead
April CPI data lands Tuesday. Economists expect 0.6% month-over-month and 3.7% year-over-year, up from 3.3% in March. Core CPI is expected near 2.7% year-over-year. March already showed the year's fastest annual pace, with energy surging as gasoline prices climbed. David Auerbach, chief investment officer at Hoya Capital, said the coming data slate could shape expectations for the Fed's policy path.
Prediction markets are pricing in sticky inflation. Polymarket traders assigned a 100% probability that 2026 inflation tops 3% and a 94% probability it exceeds 3.5%. Kalshi pricing showed April CPI above 3.2% year-over-year. Meanwhile, Polymarket traders show a 55.6% probability that the Fed will deliver no rate cuts in 2026, and a 95.5% probability that the June FOMC meeting ends with rates unchanged. Truflation's US inflation index, which uses daily price tracking rather than lagged official data, has been running near 2% year-over-year.
A hot CPI print could reinforce the Fed's hold stance, potentially dragging Bitcoin toward $80,000 and then $78,000 support. A cooler print could improve risk appetite and open a path toward $85,000.
Senate eyes crypto bill
The Senate Banking Committee is scheduled to consider the CLARITY Act on May 14. The bill is a market-structure proposal that defines when digital tokens fall under securities or commodities rules. A key compromise by Sen. Thom Tillis and Sen. Angela Alsobrooks would prohibit customer rewards on idle stablecoin holdings but allow rewards tied to active stablecoin usage.
The May 14 vote signals whether Congress can move a crypto bill through a divided Senate. A smooth markup would strengthen the bullish regulatory narrative. If it stalls, the window for federal crypto legislation tightens further this year.
Tuesday's CPI print lands first. Wednesday brings the markup. Bitcoin is caught between geopolitics, inflation, and Washington's next move.
