Failed negotiations and the U.S. preparing to blockade the Hormuz Strait have negatively impacted the markets. Over the past day, the price of the leading cryptocurrency fell by 1.4%, dropping below $71,000.
At the time of writing, the asset is trading around $70,700.
Ethereum's price also declined by 1.5%, reaching $2,180.
Negotiation Failure and Hormuz Blockade
On April 11, talks between the U.S. and Iran took place in Islamabad. The parties failed to reach an agreement, prompting a mass exit of investors from riskier assets, noted BTC Markets analyst Rachael Lucas.
13th April 2026 Daily crypto wrap: Geopolitical headlines dominated crypto markets today as US-Iran peace talks in Islamabad collapsed after 21 hours, triggering a sharp risk-off move. Bitcoin pulled back from near US$74,000 to around US$70,500 following President Trump's…
— Rachael (@Rachael_M_Lucas) April 12, 2026
U.S. Vice President JD Vance blamed Tehran for its unwillingness to accept the proposed terms. In response, Iranian authorities called Washington's demands "unreasonable."
Amid the diplomatic failure, President Donald Trump announced a blockade of shipping in the Hormuz Strait starting April 13. The restrictions will affect all vessels entering or leaving Iranian ports. According to the WSJ, the aim of the plan is to prevent the country from exporting oil.
Additionally, Trump and his advisors are discussing the resumption of strikes against Iran. Markets are already pricing in the risks of escalation. WTI crude oil futures rose by 7% to $103, while Brent contracts increased by 6.7% to $101.
First Institutional Cycle
Lucas emphasized that despite short-term fluctuations, the institutional foundation remains strong. She pointed to the dynamics of spot Bitcoin ETFs, which have shown the strongest weekly capital inflow since February.
Source: SoSoValue.
Exodus CEO JP Richardson noted that this year, financial institutions have generally "accelerated" their presence in the crypto market, while retail investors have been exiting.
This might be the first cycle in crypto history where institutions are in a bull market and retail doesn't even know it.
— JP Richardson (@jprichardson) April 13, 2026
Stablecoins at $319B. Morgan Stanley launched a Bitcoin ETF. Schwab opened a waitlist for spot bitcoin trading.
Franklin Templeton announced a crypto…
"This may be the first cycle in crypto history where institutions are in a bull market, and retail investors are completely unaware of it," he stated.
Richardson provided several examples:
- record growth in the capitalization of stablecoins;
- Morgan Stanley's Bitcoin ETF;
- launch of Schwab Crypto platform in the first half of 2026;
- Franklin Templeton's crypto division;
- mortgages backed by digital gold from Fannie Mae.
"In 2018 and 2022, institutions exited alongside retail. This time, they stayed and became more active," he noted.
MN Fund founder Michaël van de Poppe supported Richardson's view, stating that private investors are no longer interested in cryptocurrencies.
It's super clear that retail isn't interested in #Crypto.
— Michaël van de Poppe (@CryptoMichNL) April 12, 2026
Almost everyone has a hard time paying their bills on a monthly basis.
And then spending that amount of money in such a volatile asset?
Hell no.
That's why this cycle won't be the retail cycle. It's the institutional…
"It's tough for everyone to pay their bills right now. Investing in volatile assets? Definitely not. That's why this cycle is not retail-driven, but institutional, and it will last longer," the analyst stated.
As a reminder, at the beginning of April, the activity of small Bitcoin investors fell to its lowest level since 2017.