The Iran – Israel Conflict: Escalating Geopolitics, Crypto Turbulence
The escalating conflict between Iran and Israel not only heats up the Middle East but also creates shockwaves across the global financial markets, especially in cryptocurrency (crypto) – a market that is sensitive to news, sentiment, and speculative capital flow.
1. Market Sentiment: Crypto is No Longer "Immune"
Previously, many investors expected crypto to be a "safe haven" amid instability – like gold. However, the reality shows the opposite:
• Whenever conflicts flare up, Bitcoin and altcoins often drop sharply in the short term as investors flee to more stable assets (USD, gold).
• On April 13, 2024, when Iran attacked Israel with a series of missiles and UAVs, the price of BTC plummeted from ~71,000 USD to nearly 60,000 USD in just a few hours – losing over 150 billion USD in total market capitalization.
⛔ Panic sentiment (fear) still strongly influences the crypto market, although long-term perspectives may differ.
2. Capital Flow Away from Risky Assets
Crypto is a highly volatile asset, and as geopolitical tensions rise, institutional investors often:
• Withdraw capital from altcoins and speculative tokens, causing smaller tokens to drop more sharply than BTC/ETH.
• Increase holdings in stablecoins (USDT, USDC) – both to wait for buying opportunities and to hedge in the short term.
• Shift a portion of assets into physical gold and U.S. government bonds.
As a result, the crypto market temporarily loses liquidity, many new projects fail to raise capital, and a "psychological downtrend season" begins – even though not due to technical factors.
