The recent escalation in the Israel-Iran conflict has significantly impacted the cryptocurrency market, highlighting its sensitivity to geopolitical events.
Following Israel's extensive airstrikes on Iran's nuclear and military facilities, Bitcoin's price plummeted to approximately $103,000, marking a notable decline from previous levels. Ethereum also experienced a sharp drop, falling below $2,500. Other cryptocurrencies, including XRP and Solana, saw declines ranging from 5% to nearly 9% .
This downturn underscores the crypto market's vulnerability to global instability. Unlike traditional safe-haven assets such as gold, which saw a 1.1% increase during the same period, cryptocurrencies like Bitcoin did not exhibit the expected "digital gold" behavior
The sell-off was further exacerbated by significant liquidations in the futures market, with over $1.5 billion wiped out due to high leverage positions. Additionally, U.S. spot Bitcoin ETFs recorded outflows exceeding $240 million, indicating a retreat by institutional investors.
