Understand Why Global Conflicts Disrupt the Crypto Market.
When there is geopolitical tension, investors tend to flee from riskier assets — such as cryptocurrencies — and seek more traditional safe havens, like gold, the dollar, or U.S. Treasury bonds.
We cannot forget that this week, after Israel's attack on Iran, the crypto market lost over $1 billion in value in just a few hours. Bitcoin alone dropped from $108,000 to $103,000, and altcoins like Solana and Cardano fell by more than 5%.
A prolonged conflict can drive up oil prices, increase global inflation, and force central banks to reassess monetary policies. This affects risk appetite and, consequently, the crypto market.
The spread of negative news generates panic and impulsive selling decisions, which amplifies the decline in prices.
Even so, interestingly, despite the initial drop, Bitcoin historically tends to recover and even appreciate during times of crisis, being viewed by some as an alternative store of value to gold.
In any case, the moment calls for caution, as high volatility tends to increase. Let's stay alert to the news and know how to protect our hard-earned capital.
