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The Iran Ceasefire — A Fragile Truce That Has Not Held

• On April 8, the US and Iran agreed to a two-week ceasefire mediated by Pakistan, conditional on Iran allowing safe passage through the Strait of Hormuz.
• The ceasefire has been violated repeatedly by both sides. Iran halted Strait traffic again after Israel launched strikes on Lebanon that Iran argued were not covered under the agreement. On April 13, the US announced a naval blockade of the strait. Iran's Foreign Minister briefly declared the Strait "completely open" on April 17, but within days, Iran reversed that position after the US refused to lift the blockade on Iranian ports.
• The ceasefire expires on April 22. US Vice President JD Vance is travelling to Islamabad for a second round of talks, but Iran has not publicly confirmed attendance. The US Navy seized an Iranian-flagged cargo vessel attempting to bypass the blockade in the Gulf of Oman over the weekend, marking a fresh escalation. Key sticking points remain: control of Iran's uranium stockpiles and the full reopening of the Strait of Hormuz.

Our Take: Markets remain volatile and show how quickly sentiment can reverse on geopolitical headlines. But the underlying situation has not materially improved. The Strait of Hormuz remains the central chokepoint, and the ceasefire expires soon with no deal in sight.

Oil Higher, Inflation Elevated — The Fed Signals No Relief

• WTI crude is trading above $86 per barrel after surging on Iran's reversal on the Strait. Analysts have warned that a sustained closure could push oil to $120, which would effectively eliminate any prospect of a Fed rate cut in 2026.
• At its March FOMC meeting, the Fed held rates at 3.50–3.75% and raised its full-year inflation forecast to 2.7%, up from 2.4%. Chair Powell acknowledged the oil shock "for sure shows up" in the inflation projections, while pushing back against rate cut expectations. The median Fed projection still shows one cut in 2026, but seven policymakers now project zero cuts. The Fed is expected to continue to keep rates unchanged in its upcoming April FOMC meeting.

Our Take: Elevated oil sustains inflation, which delays rate cuts, which suppresses liquidity, which weighs on risk assets including crypto. Bitcoin's move to ~$78,000 this month occurred without any improvement in the monetary policy outlook. That makes the recovery difficult to characterize as structurally driven. Until oil normalizes, or the Fed signals a meaningful easing pivot, the macro environment remains a headwind to crypto.

Kelp DAO — $292 Million Exploit, Largest DeFi Hack of 2026

• On April 18, an attacker drained 116,500 rsETH, approximately $292 million, from Kelp DAO's LayerZero-powered cross-chain bridge. The attacker manipulated LayerZero's cross-chain messaging layer into releasing the rsETH reserve that backed wrapped versions of the token across more than 20 networks including Base, Arbitrum, Linea, and Scroll. Kelp's emergency multisig froze core contracts 46 minutes after the initial drain, successfully blocking two follow-up attempts targeting a further ~$100 million.
• rsETH fell approximately 23% in the aftermath. Aave, SparkLend, and Fluid immediately froze their rsETH markets. Aave's TVL fell by approximately $6 billion, and its native token dropped as much as 20% before partially recovering. Aave confirmed its own smart contracts were not compromised, but the freeze on rsETH collateral exposed bad debt in the system from borrowers who had used the token as collateral.
• The Kelp DAO exploit is the largest DeFi hack of 2026, surpassing the $270–$285 million Drift Protocol drain on April 1, which was attributed to North Korea-affiliated actors.

Our Take: The Kelp DAO attack exposed a structural risk that has grown alongside the liquid restaking ecosystem: a single cross-chain bridge holding reserves backing a token across 20+ networks represents a significant concentration of systemic risk. The contagion into Aave, the largest DeFi lending protocol, demonstrates how quickly credit linkages can amplify an isolated exploit. Anbruggen Capital has no direct or indirect exposure to this exploit.

Global Macro View

April has been almost entirely geopolitics driven. Every significant price move in crypto has traced directly to developments in the Iran conflict and their effect on oil. Bitcoin's intra-month range from approximately $65,000 to $78,000 maps almost precisely onto the arc of the ceasefire: announced April 8, partially unraveled by April 13, briefly revived April 17, and deteriorating again as its expiry approaches Wednesday.

The Federal Reserve's position has hardened. The March 18–19 FOMC delivered a hawkish hold, rates unchanged at 3.50–3.75%, inflation forecast revised to 2.7%, and Powell's language leaving no room for near-term cuts. With the next meeting on April 28–29, just eight days away and not a projections meeting, markets will be parsing statement language and press conference tone rather than a new dot-plot.

WTI is back above $86 and remains above pre-war levels. The IEA has warned that April's supply disruption may exceed March's. Infrastructure damage to Qatar's Ras Laffan LNG complex adds a further dimension to the energy supply crisis that will take months to resolve regardless of how negotiations unfold this week.

Crypto Spotlight

DeFi Under Siege 

April 2026 has been one of the most damaging months for DeFi security on record. The Kelp DAO exploit ($292M on April 18), the Drift Protocol drain ($270–$285M on April 1, attributed to North Korean actors), and a series of smaller incidents have collectively extracted well over $575 million from the DeFi ecosystem in a single month. For institutional allocators, April is a useful and sobering reminder to always re-underwrite DeFi risks. 

Chart: AAVE protocol, total value locked down significantly after Kelp DAO exploit:

Chartbook

Bitcoin

BTC is technically still in a downtrend with current price action ranging between $60,000-$80,500. A decisive breakout and close above $80,500 is necessary for a bullish reversal pattern for Bitcoin.

Ethereum

Similar and correlated to BTC, ETH remains in a technical downtrend with price ranging between $1,740-$2,620. A close above $2,620 is necessary for ETH to form a bullish reversal.

U.S. Oil Futures

U.S. Oil Futures (WTI) is in a wide, volatile range with a high of $119 and a local low of $76. Trading below this low will signal positive progress with the Iran War and will be important for inflation to ease.

Looking Ahead

Three significant events converge in the coming days that will likely set the tone for crypto heading into May. The most immediate is the expiry of the US-Iran ceasefire this April 22 (Wednesday). Oil remains volatile and elevated, a reminder of how directly the conflict's trajectory feeds into inflation expectations and, by extension, the Federal Reserve's room to maneuver. A breakdown in talks without a new framework would likely push oil upwards, prolonging the inflationary shock that has kept the Fed on hold since the conflict began.

That brings us directly to the FOMC meeting on April 28–29. With no updated dot-plot at this meeting, markets will be focused entirely on the statement language and Chair Powell's press conference. The base case is a hold at 3.50–3.75%, but the key question is whether the committee's language hardens further in response to oil's resurgence. Any signal of reduced tolerance for cuts in 2026 would be a meaningful headwind for risk assets.

Finally, the fallout from the Kelp DAO exploit continues to unfold. With $292 million drained and rsETH's peg under pressure across more than 20 networks, the DeFi ecosystem remains in damage-assessment mode. The contagion into Aave, the largest lending protocol in DeFi, has been partially contained, but lingering uncertainty around bad debt and collateral quality will weigh on sentiment in the near term.

We remain cautious and are monitoring all three developments closely as they unfold in real time.

 

Disclaimer: Investing in cryptocurrencies involves significant risk. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.