Tension between Israel and Iran: impacts on the crypto market

In recent weeks, the escalation of tension between Israel and Iran has returned to the center of global geopolitical attention. The increase in aggressive rhetoric, strategic military movements, and exchanges of indirect attacks via allied groups (such as Hezbollah and militias in Iraq and Yemen) have raised the risk of a direct confrontation between the two powers in the Middle East.

This instability generates ripple effects in traditional financial markets and, inevitably, in the cryptocurrency market. In times of uncertainty and heightened geopolitical risk, Bitcoin (BTC) tends to react as a "safe haven asset" – similar to gold – with investors seeking protection against the traditional financial system, especially when there is depreciation of local fiat currencies or capital flight from conflict regions.

How BTC may react:

Short term (volatility): Demand for alternative and decentralized assets increases, which may generate buying pressure on BTC, especially if there is a risk of international sanctions, banking blockades, or declines in global stock markets.

Correction risks: If tensions evolve into a direct conflict involving major powers, the market may enter a state of widespread panic, which historically can also provoke mass sell-offs of assets, including cryptos, for immediate liquidity protection.

Impact on oil and inflation: A conflict between Israel and Iran could drastically raise oil prices, globally affecting inflation and monetary policy. With higher interest rates, risk assets such as altcoins tend to face greater pressure.

Impact on altcoins:

Altcoins, being more volatile and sensitive to market sentiment, may suffer more intensely in a risk-averse scenario. BTC dominance tends to rise in these moments, as investors prefer more established and liquid assets. Therefore, it is expected:

Capital flight from altcoins to BTC and stablecoins;