#IsraelIranWar Initial Crypto Market Reactions to the Conflict

The launch of "Operation Rising Lion" by Israel and the subsequent retaliation by Iran with "Operation True Promise III" created an immediate shockwave. Bitcoin (BTC) dropped roughly 5.5% from $109,000 to $102,800, while Ethereum, Solana, and other altcoins tumbled as well.

Over $230 billion in market capitalization was wiped out within a day, with $1.2 billion in liquidations across centralized and decentralized exchanges. Crypto fear levels rose slightly, but investor sentiment remained largely optimistic.

What we saw was not just panic selling. Institutional players like MicroStrategy continued to signal buying intentions. Meanwhile, spot Bitcoin ETFs attracted over $1.3 billion in inflows during the same week. This resilience showed that while short-term volatility exists, long-term confidence is not shaken.

Iran Israel War Impact on Crypto

Is Bitcoin Really a Safe Haven?

The debate around whether Bitcoin is a safe haven asset reignited. Traditionally, assets like gold and government bonds have attracted investors during wars. That’s exactly what we saw: gold surged to over $3,400, while U.S. Treasuries rallied. Bitcoin? It declined.

This suggests Bitcoin currently behaves more like a "risk-on" asset. But the story doesn’t end there. Historical data shows BTC often rebounds and outperforms following geopolitical shocks. For example, after an 8.8% drop during Iran’s October 2024 attack on Israel, Bitcoin later surged 80%.

So while Bitcoin may not act like digital gold during the initial wave of conflict, its long-term resilience still supports the store-of-value narrative.