The situation in the Middle East has been going viral again these past two days! The missile strikes between Iran and Israel and Trump’s tough stance have made the global market restless, and the cryptocurrency market is as exciting as a roller coaster ride. The most concerning question now is: Will this geopolitical storm cause the cryptocurrency market to soar or plummet?

1. Trump's "political business" and the intricate connection with the cryptocurrency world

The Trump family's penetration into the cryptocurrency world is far beyond imagination. According to the financial report disclosed on June 13, 2025, Trump earned $57.7 million through his own cryptocurrency company World Liberty Financial, and his three sons are co-founders. What's even more exaggerated is that the "Trump Coin" ($TRUMP) he launched before taking office soared 15,000% in 12 hours, but plummeted 53% two days later, staging a textbook-level speculative carnival. This "issuing coins to cut leeks" operation has made the cryptocurrency world complexly dependent on Trump's policies - every word he says may become a fuse for the market.

What is more noteworthy is that the Trump administration is promoting the "Americanization" of cryptocurrency regulatory policies. For example, it is setting up a strategic Bitcoin reserve, appointing a cryptocurrency supporter as the chairman of the SEC, and even planning to include confiscated Bitcoins into national assets. This policy orientation may attract capital inflows, but it may also cause regulatory uncertainty, especially when Trump's political interests are intertwined with the interests of the cryptocurrency circle, market fluctuations will be multiplied.

2. How the Middle East powder keg ignites the fuse of the cryptocurrency circle

The current situation in the Middle East can be described as "multiple crises superimposed":

1. Military conflict intensifies: Iran launches multiple rounds of missile attacks on Israel, while Israel launches air strikes on Iranian nuclear facilities, with casualties on both sides increasing. Iran even threatens to launch strikes on US military bases. Although the United States has not directly participated in the war, it has evacuated some personnel from the Middle East.

2. Economic sanctions and countermeasures: The United States continues to increase its sanctions on Iran, and Iran fights back by supporting proxies such as the Houthis and Hezbollah, resulting in the risk of disruption to the Middle East energy supply chain.

3. The diplomatic game escalates: Trump and Putin spoke on the phone to try to cool down the conflict, but the two sides have obvious differences in their positions; Iran refuses to resume nuclear negotiations, and Israel urges the United States to directly participate in the war.

This high level of uncertainty has a dual impact on the cryptocurrency world:

• Short-term panic selling: After the Israeli airstrike on June 13, the price of Bitcoin plummeted to $102,614, and more than 240,000 people were liquidated. Investors were worried that the escalation of the conflict would trigger a global economic recession, and thus sold risky assets.

• Long-term safe-haven demand: Standard Chartered Bank predicts that if the Federal Reserve cuts interest rates more than expected, Bitcoin may rise to $200,000 by the end of 2025. Some funds may view cryptocurrencies as a tool to hedge geopolitical risks, especially when the credit of the US dollar is damaged by the debt crisis.

3. Key variables for the rise and fall of the cryptocurrency market

1. Trump's policy trump card: Trump's cryptocurrency policy has a clear "duality" - on the one hand, he makes money by issuing coins, and on the other hand, he strengthens the US's dominance through regulation. If he takes extreme measures in the Middle East conflict (such as direct military intervention), it may cause the market to worry about the global economy and cause the cryptocurrency market to plummet; on the contrary, if he promotes a diplomatic solution, coupled with the Fed's interest rate cut, the cryptocurrency market may rebound.

2. Bitcoin's market attributes: Bitcoin's recent correlation with the U.S. stock market is as high as 0.74, which means that its trend is largely affected by the overall market sentiment. If the conflict in the Middle East causes the U.S. stock market to fall, Bitcoin may weaken simultaneously; but if the market regards cryptocurrencies as "digital gold", the inflow of safe-haven funds may drive prices up.

3. Regulation and liquidity: The establishment of the US strategic Bitcoin reserve, the progress of ETF approval, and the regulatory policy of stablecoins will all affect the flow of market funds. In addition, the Federal Reserve’s monetary policy (such as the pace of interest rate cuts) is crucial to the liquidity of the cryptocurrency circle.

IV. The collision between historical experience and current reality

During the 2022 Russia-Ukraine conflict, Bitcoin was expected to be a "safe haven asset", but it eventually plummeted by 70% due to a liquidity crisis, while gold rose against the trend. This shows that in extreme cases, the speculative attributes of cryptocurrencies may overwhelm their safe haven attributes. The current situation in the Middle East is similar to the Russia-Ukraine conflict:

• Similarities: Both are proxy wars for great power competition, both involve energy supply chain risks, and both may trigger global economic shocks.

• Differences: The Trump administration has a more positive attitude towards cryptocurrencies, and the United States has established a strategic Bitcoin reserve, which may change market expectations.

Overall, the short-term trend of the cryptocurrency market will depend on the escalation of the conflict and Trump's policy choices, while the long-term trend will be affected by global liquidity and regulatory frameworks. In this case, investors need to be wary of drastic fluctuations in market sentiment and pay attention to the linkage effect between Bitcoin and traditional safe-haven assets such as gold and the US dollar.

Conclusion: Investment logic in troubled times

The uncertainty of the situation in the Middle East has put the cryptocurrency industry at a crossroads again. If you are a short-term trader, it is recommended to pay close attention to every statement made by Trump and the latest developments in the conflict, which may become a turning point in the market; if you are a long-term holder, you can consider using cryptocurrency as part of your asset allocation, but be prepared to withstand high volatility. In any case, in this era of frequent "black swans", it is more important to maintain a rational and flexible strategy than to predict ups and downs.

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