#IsraelIranConflict Will the escalation of tension between Israel and Iran lead to a temporary drop in cryptocurrency markets?
And why might this drop happen?
1. Global uncertainty:
Major geopolitical tensions (such as the possibility of war or a large military strike) lead to investor anxiety.
Investors usually shift from high-risk assets like cryptocurrencies to safer assets like gold or the dollar.
2. Withdrawal of liquidity from the market:
In times of crisis, many traders prefer to liquidate their investments, leading to panic selling.
3. The impact of the traditional market:
If global stock markets or oil decline due to tension, this may also pull the crypto market down due to the psychological or financial relationship between the markets.
But! There are factors that may limit this impact:
1. Cryptocurrencies do not always follow traditional markets.
Sometimes cryptocurrencies move opposite to the market (like Bitcoin being used as a hedge).
2. Institutional investors have become more present in the market.
They may deal with crises more calmly or seize buying opportunities during declines.
3. Lack of direct connection between Iran or Israel and the cryptocurrency market.
That is, there is no large digital economy in either capable of radically changing the rules of the game.