FTSE 100 Edges Higher as Bitcoin Rally Boosts Risk Appetite

UK stocks moved modestly higher on Tuesday as Bitcoin extended its rally to a more than three-month high, helping support broader investor appetite for risk despite continued geopolitical tensions surrounding Iran.

The FTSE 100 gained 0.15% as of 03:25 ET (07:25 GMT), while other major European markets also advanced. Germany’s DAX rose 0.24% and France’s CAC 40 added 0.26%.

Sterling was little changed against the US dollar, trading 0.03% higher at $1.3640.

Bitcoin Climbs Above $80,000

Bitcoin (COIN:BTCUSD) moved above the $80,000 mark, trading around $80,323 after reaching $81,237.94 during Asian trading. That represented its strongest level since mid-May.

The cryptocurrency has gained approximately 28% during August and is on course for its strongest monthly performance since November 2024.

Recent momentum has been supported by a softer US dollar following Treasury Secretary Scott Bessent’s plans for Treasury bond buybacks, which helped renew buying interest across cryptocurrency markets.

Bitcoin has also risen around 16% since US President Donald Trump called on Congress last week to approve legislation providing greater regulatory clarity for cryptocurrencies.

Iran Tensions Keep Geopolitical Risks Elevated

The stronger tone across risk assets came despite continued uncertainty surrounding the confrontation between Washington and Tehran.

US War Secretary Pete Hegseth said on Monday that Washington was “by no means” ruling out military action against Iran. He told reporters that “if we need to use kinetic strikes, we’ll use them,” while indicating that economic pressure remained the preferred approach.

His comments followed further warnings from Bessent as the US intensified its sanctions campaign against Tehran.

Bessent said “no one is above the reach of US sanctions,” raising the possibility that Chinese banks involved in purchases of Iranian oil could face measures. The US has also announced additional sectoral sanctions and an “Operation Economic Outcast” campaign, with Bessent warning that “the clock just started ticking.”

Iranian official Mohsen Rezaei responded by warning that Tehran could halt all Gulf oil exports if the “economic war” continued.

Geopolitical tensions have remained high since US and Israeli strikes reportedly killed Iran’s Supreme Leader on February 28. Iran subsequently retaliated and partially restricted traffic through the Strait of Hormuz. An April ceasefire reduced the intensity of the conflict, although periodic flare-ups have continued.

Oil Prices Fall Despite Middle East Risks

Source: uk.finance.yahoo.com