India's military strikes on Pakistan heighten geopolitical tensions, shaking global markets.
Bitcoin briefly reaches $97,300 but faces hurdles amid growing concerns over conflicts.
Investors are shifting to gold and the U.S. dollar as demand for safe assets rises.
While sentiment around Bitcoin has improved due to recent news of renewed trade talks between the U.S. and China, the escalation of tensions between India and Pakistan now threatens the ongoing rise of the cryptocurrency.
India has begun military strikes on territories under Pakistani control, targeting what Indian military officials described as terrorist camps. Airstrikes were carried out in response to an explosion on April 22 in Pahalgam that killed 26 people, including one foreign national.
The Pakistani government condemned the strikes, warning of a 'measured response in case of provocation', raising concerns of potential military escalation between the two nuclear powers. Rising tensions have intensified pressure on global financial markets, which were already on edge due to inflation issues and regulatory uncertainty.
Markets across Asia opened lower following the news. India's NIFTY 50 fell by 2.3%, while Pakistan's KSE-100 dropped by 3.1%. European and American futures followed suit.
Meanwhile, investors avoided risky assets, favoring gold and the U.S. dollar. Gold rose by 2.2% to $2,750 per ounce, while the U.S. dollar index climbed to 104.50.
Is a cryptocurrency crash looming?
Earlier today, Bitcoin briefly touched $97,300, continuing its attempts to break the $100,000 mark after its rise stalled last week.
The recent surge in cryptocurrency markets was fueled by news that U.S. and Chinese officials will hold trade talks in Switzerland this week to ease tensions between the world's two largest economies. Chinese Vice Premier He Lifeng is expected to participate in the talks from May 9 to 12 along with U.S. Treasury Secretary Scott Bessen and Trade Representative Jamison Greer.
However, the escalation of the conflict between India and Pakistan threatens to undermine market optimism. Nevertheless, industry leaders remain confident that the crypto rally will continue.
Binance founder Changpeng Zhao (CZ) recently predicted that Bitcoin could reach $500,000 or even $1 million in this bull cycle. Such a jump would bring Bitcoin's valuation closer to the gold market capitalization of $22 trillion.
Calls for peace offer temporary relief
While the conflict between India and Pakistan has raised concerns about market instability, the White House has confirmed contacts with both governments, calling for de-escalation. U.S. President Donald Trump called for peace, encouraging both countries to resolve their disputes diplomatically.
These diplomatic efforts have provided brief relief to nervous markets, yet volatility is expected to persist if tensions continue to rise.