Cryptocurrency markets experienced a steep decline, shedding approximately $80 billion in value within 24 hours as tensions escalated between the US and Iran. The downturn intensified after the US military conducted new airstrikes targeting an Iranian military site and intercepted four Iranian drones perceived as threats near the Strait of Hormuz.
The US official described these actions as measured and defensive, aimed at preserving a fragile ceasefire in the region. However, Iran’s Islamic Revolutionary Guard Corps quickly retaliated by attacking a US airbase in Kuwait, fueling further uncertainty. These developments occurred amid ongoing negotiations intended to resolve the conflict that began in late February with a series of US and Israeli offensives.
The renewed military actions reversed earlier optimism when cryptocurrency prices had rallied following US hints at a forthcoming peace deal. Bitcoin dropped 3.5%, falling to $72,646 on Coinbase, marking its lowest price since mid-April. Ether also declined sharply, breaking below the psychologically critical $2,000 mark to trade at $1,976, its weakest level since late March.
Market analysts pointed to heightened geopolitical risk and the threat of oil supply disruptions as key drivers behind the sell-off. With increased volatility, digital assets continued to behave more like high-risk investments than safe havens, despite their usual narratives as inflation hedges.
Meanwhile, crude oil prices surged as geopolitical tensions raised concerns about supply constraints. West Texas Intermediate (WTI) crude jumped 3.5% above $92 per barrel, while Brent crude approached $98 per barrel, reflecting fears of escalating conflict impacting global energy markets.