Iran and US discuss reopening Strait of Hormuz: Bitcoin, stocks and gold rise

Iran and the United States are discussing a phased deal to reopen the Strait of Hormuz in exchange for lifting the US blockade. Neither country wants to be the first to admit, but investors react enthusiastically to the news. Already after fifteen minutes, about 700 billion dollars in market value was added to US equities, precious metals and the crypto market.

Negotiators from both countries are talking in New York about a way out in steps, news agency Reuters reports. Iran then again lets ships sail through the strait, Washington lifts the blockade that is squeezing the Iranian economy.

The Strait of Hormuz, the narrow passage between Iran and Oman, is the most important oil route in the world. Iran has been keeping it largely closed for months.

A high-ranking Iranian official outlined what that might look like at the UN. “One way to move forward would be to solve the crisis in phases. The first would be to end the blockade and reopen Hormuz,” he said.

Iran would also potentially get back frozen funds: money that is stuck abroad due to sanctions.

The obstacle is trust. Neither side wants to surrender its leverage first, Iranian, regional and Western sources tell Reuters. Whoever gives in first, exposes their buttocks.

An earlier appointment already collapsed in July. US President Donald Trump expects a new agreement only after the midterm elections on 3 November.

Washington remains tough in the meantime. “Iran is desperate for a deal, President Trump holds all the cards and will make the decision that is best for the United States,” said a White House official.

Earlier this week, Iran said it would be able to open the strait within seven days if the blockade goes away. On Wednesday, Trump threatened to destroy the UN, but he also called a consultation with Iran “very productive”.

The message came out around 6:00 pm our time and within a few minutes the oil price had already fallen by more than 3 percent. Earlier in the day, oil took a big leap after missiles from the Iranian-backed Houthis in Saudi Arabia.

As is often the case, stocks, Bitcoin and also gold have shot in the opposite direction of the oil price:

• Bitcoin gained about 0.7 percent in value in a short time. The crypto coin then fell back slightly, but has since recovered from that.
• The S&P500 immediately shot up 0.52 percent.
• The Nasdaq100 shot 0.78 percent into the air.
• Gold jumped 0.39 percent.