If the United States joins the Israel-Iran conflict, the cryptocurrency market will most likely experience strong downward pressure in the short term.
## Short-term impact on crypto markets
- Sharp price drop: Experts predict that the U.S. entering the war could lead to a Bitcoin price drop of 10–20% within a few days, and the largest altcoins could lose even more. In extreme scenarios, forecasts of a 50% drop in Bitcoin have emerged, although currently most analyses focus on the range of 10–20%.
- Panic and risk-off: Investors will seek safe havens such as the U.S. dollar, gold, or government bonds, which will further weaken demand for cryptocurrencies.
- High liquidations: During the escalation of the conflict in June 2025, the crypto market already recorded over a billion dollars in liquidations, and market capitalization fell by hundreds of billions of dollars.
- Increase in volatility: The crypto market will become exceptionally unstable, and any political or military decisions will have an immediate impact on prices.
## Medium- and long-term outlook
- Potential rebound: Historically, after the initial shock and declines, the cryptocurrency market (especially Bitcoin) has shown a tendency to rebound within a few weeks, especially if the geopolitical situation stabilizes.
- Increase in inflation: A prolonged conflict may lead to rising oil prices and inflation, which in the long term could be beneficial for Bitcoin as an inflationary hedge, although this is not certain and depends on many macroeconomic factors.
- Restriction of institutional flows: If the conflict prolongs, there may be an erosion of liquidity and a restriction of institutional flows in the crypto market.
## Summary
The U.S. entry into the Israel-Iran conflict will likely trigger a sharp decline in cryptocurrency prices in the short term, especially Bitcoin and the largest altcoins. In the longer term, a rebound is possible if the situation stabilizes, but the market will remain very sensitive to any changes in sentiment and political decisions. Investors should prepare for high volatility and consider the possibility of bearish sentiment persisting for an extended period.
