President Donald Trump has put military strikes back on the menu if nuclear negotiations with Iran collapse, warning that a “full, large-scale assault” could be launched on short notice. The statement, made on May 19, adds a layer of urgency to what Trump himself described just days later as a deal that was “largely negotiated.”

The state of play between Washington and Tehran

By May 23, Trump indicated that an agreement covering Iran’s nuclear program and the reopening of the Strait of Hormuz was close to completion. Trump urged negotiators not to rush the process, even as a US blockade of Iranian ports remains firmly in place.

The Strait of Hormuz matters because roughly a fifth of the world’s oil supply passes through it.

The US and Israel have already conducted strikes on Iranian facilities dating back to February, creating significant instability in the region.

Iran’s parliament speaker has already responded to Trump’s latest threats, warning that renewed attacks would lead to “more crushing and more bitter” consequences.

Trump’s insistence that strikes could happen “on a moment’s notice” suggests the White House views military readiness as leverage in negotiations, not just a contingency plan.

What previous strikes did to crypto markets

When earlier strikes hit Iranian facilities, crypto markets saw over $701 million in liquidations. The pattern has been consistent: strikes happen, crypto sells off hard, leveraged longs get liquidated en masse. Then a ceasefire gets announced, and Bitcoin and Ether stage sharp recoveries as risk appetite returns.

What this means for investors

For crypto-specific investors, the $701 million liquidation event during earlier strikes serves as a cautionary tale about leverage in uncertain environments. Traders running high leverage on long positions are essentially betting that diplomacy succeeds.

Any disruption to the Strait of Hormuz would send crude prices sharply higher, which feeds into inflation expectations, which affects central bank policy, which eventually trickles down to every risk asset on the planet, crypto included.

Trump’s characterization of the deal as “largely negotiated” suggests both sides see the outline of an agreement. Until ink hits paper and the blockade lifts, the threat of escalation will continue to act as a weight on risk sentiment across both traditional and crypto markets.