WASHINGTON: The United States is preparing for the possibility of renewed large-scale military operations against Iran following President Donald Trump’s setback in the midterm elections, raising concerns about fresh volatility in global financial markets, including cryptocurrencies.
The developments come after Democrats secured control of both chambers of Congress in the November 3 elections, a result that could complicate Trump’s domestic and foreign policy agenda.
According to a report by Axios, US military officials are completing preparations for a potential resumption of major combat operations against Iran, while additional military assets are being deployed to the Middle East. However, Trump has not announced a final decision on whether to restart large-scale strikes.
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The uncertainty threatens to disrupt a recovery in financial markets that followed the election results, with equities advancing, oil prices retreating and Bitcoin recovering toward $81,000.
Trump Faces Pressure Over Iran Strategy
The possibility of renewed military action comes as the Trump administration considers how to handle its continuing confrontation with Tehran.
According to Axios, divisions have emerged among senior US officials over whether Washington should pursue a diplomatic settlement, maintain economic pressure or resume military operations.
Vice President JD Vance has reportedly supported negotiations and privately criticised Israeli Prime Minister Benjamin Netanyahu’s approach to Iran.
Other administration officials have advocated continued military pressure, arguing that further action may be necessary to achieve Washington’s strategic objectives.
Trump previously indicated that he was not rushing to decide whether to resume attacks, leaving open the possibility of further negotiations.
The administration’s options include restarting military operations, reaching an agreement with Tehran or maintaining the existing naval blockade and economic sanctions.
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Financial Markets Rally Following US Midterm Elections
Financial markets initially responded positively to the election outcome as investors assessed the implications of a divided political environment in Washington.
According to the market figures cited in the original report, the S&P 500 gained approximately 1.8%, while the technology-focused Nasdaq advanced around 2%.
Oil prices reportedly fell nearly 9% to approximately $87.75 per barrel, reflecting expectations that the prospects of renewed military escalation could diminish.
Precious metals also recorded gains, with gold rising around 3.5% and silver advancing approximately 5%.
Bitcoin recovered from approximately $75,500 to around $81,000, benefiting from improved investor sentiment and renewed interest in risk-sensitive assets.
These figures reflect the market snapshot described in the original report rather than independently verified live prices.
Oil Prices Could Determine Bitcoin’s Next Move
Energy markets are expected to play an important role in shaping investor reactions to any renewed confrontation between Washington and Tehran.
Gareth Soloway, chief market strategist at Verified Investing, suggested that a more balanced political environment in Washington could make it harder for Trump to pursue additional military action without facing greater scrutiny.
Before reports of renewed military preparations emerged, Soloway had indicated that improving prospects for negotiations could push oil prices toward the $70-per-barrel range before the end of the year.
However, fresh military strikes could reverse that trend, particularly if fighting disrupts energy infrastructure or shipping routes in the Middle East.
Higher crude prices could intensify inflationary pressures, increase government bond yields and weaken investor demand for riskier investments.
Such conditions could weigh on technology stocks and cryptocurrencies, including Bitcoin and Ethereum.
Bitcoin Faces Potential Volatility as Geopolitical Risks Increase
Bitcoin’s recovery toward $81,000 has brought renewed attention to whether the cryptocurrency can sustain its recent gains amid rising geopolitical uncertainty.
Soloway identified approximately $75,500 as an important technical support level after Bitcoin rebounded from that area.
A deterioration in US-Iran relations could trigger another wave of selling, potentially bringing the $75,000 to $76,000 range back into focus.
Other cryptocurrencies, including Ethereum and XRP, could experience sharper fluctuations if investors reduce exposure to speculative assets.
Historically, periods of heightened geopolitical uncertainty have prompted investors to reassess risk, sometimes benefiting traditional safe-haven assets such as gold.
However, Bitcoin’s response to geopolitical developments is not always consistent, with movements also influenced by liquidity, interest-rate expectations and broader market sentiment.
Diplomatic Progress Could Support Cryptocurrency Recovery
Despite the military preparations, diplomatic channels remain open.
According to reports, mediators have continued efforts to encourage an agreement between Washington and Tehran, while some senior Trump administration officials favour negotiations over renewed confrontation.
A diplomatic breakthrough could ease concerns over energy supplies and help stabilise financial markets.
Lower oil prices may also reduce inflation expectations, potentially creating a more supportive environment for equities and digital assets.
Conversely, an escalation involving Iran, Israel and US forces could increase volatility across energy, currency, equity and cryptocurrency markets.
Investors Monitor White House Decisions and Key Market Levels
Market participants are closely watching developments in Washington and the Middle East for indications of the administration’s next steps.
Statements from the White House and Pentagon, changes in US military deployments and responses from Iranian and Israeli officials could influence investor sentiment.
Crude oil prices remain another important indicator, particularly if renewed tensions push prices above $90 per barrel.
For cryptocurrency traders, Bitcoin’s ability to maintain support near $75,000 to $76,000 could provide insight into the strength of the recent recovery.
While the United States has reportedly prepared for further military action, a decision to resume major combat operations has not been announced.
The direction of global financial markets, including Bitcoin, will likely depend on whether Washington and Tehran move toward a negotiated settlement or another phase of military escalation.
