#IsraelIranConflict HOW THE SITUATION WITH IRAN AND ISRAEL MAY DEVELOP.
Casus Belli (Cause for War) — this is how the phrase translates from Latin, which too often defines the economy of the coming months. This time, it's serious.
📜Israel has officially launched Operation “Am Kalavi” (With the People as a Lion). They have already struck at Iran's nuclear program and facilities capable of carrying long-range missiles, including the nuclear center in Natanz.
The point of no return, as the Israelis themselves declare.
The market, as always on such days, reacted with a sharp drop. Liquidity is pulled out of risky assets and sent to gold. I predict today we will have an ATH in gold.
Historically, America has played a dual role in the region:
— as Israel's defender,
— as the main moderator of relations with Iran.
But now Trump is back in the White House. And his rhetoric is as always on the edge.
“I don’t want Israel to attack — it will ruin everything.”
“We are close to a deal with Iran.”
“There is a probability of a large-scale conflict. Something may happen.”
He wants a deal, not war, because it's electorally beneficial. But does he control the process? It's hard to say.
But this has all happened before. And not once.
The Middle East has always been the geopolitical core of the global economy. And every escalation triggers a cascading reaction in the markets:
— Israel-Palestine conflict → rise in gold and oil
— The threat of a blockade of the Strait of Hormuz → spike in fuel prices
— Sanctions against Iran → inflationary pressure worldwide
— Hamas and Hezbollah → capital flight to safe havens (dollar, gold)
All this has always ended with a surge in volatility, outflow of liquidity from risky assets, including crypto. A bit of history:
— May 2018. The US withdrew from the nuclear deal, which caused the first serious concerns about escalation. Crypto fell, BTC by about 5%: the duration of the correction was about a week.
— January 2020. After the elimination of Soleimani and Iran's retaliatory attacks, BTC fell by 3-4%. However, the market stabilized about seven days later.
— April 2024. The attack on Israel with rockets from Iran caused BTC to drop by 8%. It took about a month to recover.
Crypto does not like geopolitics and always reacts quickly to such events with a sharp drop.
Initial risks → institutions move to cash → begins the deflation of overvalued altcoins → "running to dollar/gold."
But crypto has a second side as well:
— When regional currencies lose trust,
— When the dollar starts to be printed more actively (against the background of defense spending),
— When the US national debt exceeds $36 trillion again,
Then they remember that Bitcoin is not just an asset, but an alternative.
If Israel continues the campaign, and Iran responds, we are looking at a scenario like 2019, but in a much more volatile environment:
— Rise in oil and gold prices (already begun)
— Strengthening of the dollar as a safe asset (it really needs this right now)
— Rise in yields on treasuries (everything is fine here)
— The stock market drop (we will see with the opening)
— A blow to the “risky” sectors — including crypto (already)
Sometimes the drops in the cryptocurrency market during such events are not prolonged, but each case is unique, and predicting anything here for sure is difficult.
Be more careful, practice risk management.