What the Iran MOU Actually Means for Bitcoin Prices

By Juan Villaverde

Bitcoin has rallied sharply on hopes of an Iran peace deal. 

It climbed from $60,000 to $67,000 in 10 days.

And the timing lines up with a pattern that's called the market's bottom before.

The Memorandum of Understanding signed by the U.S. and Iran is a positive geopolitical development. 

Whether it leads to a comprehensive resolution remains to be seen. I expect we’ll see disputes over the fine print. 

It’s also possible the MOU ends up as a negotiating tool rather than the framework of a final deal.

Either way, I have always regarded July as a likely window for some sort of compromise.

When the Iran War does enter its final phases, that should broadly translate into a more constructive backdrop for crypto, metals and markets.

But to be clear, the conflict never structurally hurt Bitcoin.

Looking back at the entire war period from Feb. 28 to the first ceasefire on April 7, Bitcoin rose from $66K to $72K.

In other words, the geopolitical backdrop is becoming a tailwind. But it's not the driver.

Meanwhile, Japanese M2 has proven to be a remarkably reliable predictor of Bitcoin's price action.

JpM2 has stabilized over recent weeks. 

At the very least, it has stopped falling.

Right now, Japan is actively looking to raise interest rates. 

What Japan M2 needs to pick up steam is for the Fed to either cut rates or remain on pause, while Japan continues hiking. 

An end to the Iran war could push the Fed toward a pause — or even rate cuts.

If the gap between Japanese rates (around 1%) and U.S. rates (near 3.75%) begins to close, it will lift the yen in dollar terms.

This would improve Japanese liquidity conditions. 

Broadly speaking, crypto prices should remain trapped in a range between now and late July, just as they were earlier in the year.

Will Iran War negotiations affect this outlook? 

Possibly. 

But I'd argue they already have. 

I don't expect Bitcoin to deviate sharply from JpM2 now. 

Not during this peace process, either.

The good news? The selling is likely over. 

The bad news? Bitcoin doesn't appear to be in any rush to go anywhere.

I’m not going anywhere, either.

That means, I’ll see you again next Friday with my latest outlook on the crypto markets.

Best,

Juan Villaverde