Markets rally on Axios report of US-Iran ceasefire extension

Traditional markets jumped after Axios reported that US and Iranian negotiators have drafted a 60-day memorandum of understanding to extend their ceasefire. Stocks climbed, bonds rallied, and oil prices dropped.

Bitcoin, however, apparently didn’t get the memo. While legacy finance celebrated the prospect of de-escalation, BTC has been hovering below $73,000, seemingly indifferent to the diplomatic progress that sent equities higher.

What’s in the deal

The draft MOU, reported on May 23-24, goes well beyond a simple “stop shooting” agreement. It includes provisions for reopening the Strait of Hormuz without tolls, allowing Iran to sell oil freely on international markets, and initiating formal discussions on Iran’s nuclear program.

For context, the Strait of Hormuz is the narrow waterway through which roughly a fifth of the world’s oil supply passes daily. Reopening it toll-free explains why oil prices fell on the news.

The initial ceasefire was announced on April 7, following US and Israeli strikes on Iran on February 28. That original announcement alone was enough to push Bitcoin past $72,700 as traders priced in reduced geopolitical risk.

There’s one significant caveat: President Trump’s approval for the memorandum remained pending as of late May. The deal isn’t done until it’s done.

The crypto disconnect

When the original ceasefire hit headlines in April, BTC surged past $72,700. This time around, Bitcoin has stayed stubbornly below $73,000 even as traditional markets celebrated. No significant crypto protocols or altcoins appeared to be directly influenced by the ceasefire developments either.

Prediction markets are paying attention

Where crypto did show a clear response was in prediction markets. Polymarket recorded over $280 million in trading volume on ceasefire timings, with significant activity around potential peace deal and nuclear agreement outcomes.

Oil’s decline is particularly telling. If Iran is allowed to sell oil freely under the terms of the MOU, that represents a meaningful supply increase hitting global markets.

The risk here is asymmetric. If the MOU falls apart and tensions reignite, both traditional and crypto markets would likely sell off together. But if the deal goes through with Trump’s approval, traditional markets have already started pricing in the upside while Bitcoin has not.

Traders should keep a close eye on whether Trump signs off on the memorandum and whether the Strait of Hormuz provisions actually take effect.