The **Iran-Israel conflict** could negatively affect cryptocurrencies in several ways:

1. **Short-Term Volatility:** Escalating tensions may trigger a **risk-off** market sentiment, causing Bitcoin and altcoins to drop alongside stocks.

2. **Oil Price Surge & Inflation:** If oil supply is disrupted, rising energy costs could strengthen the **USD** (pressuring crypto) and prolong high interest rates, reducing liquidity for speculative assets.

3. **Regulatory Risks:** If Iran uses crypto to evade sanctions, governments may impose **stricter KYC/AML rules** or crack down on stablecoins like **USDT**.

4. **Mining Disruptions:** Iran is a major **Bitcoin mining hub**—sanctions could temporarily reduce hashrate, impacting network security.

5. **Long-Term Hedge Potential:** If the conflict escalates into a prolonged crisis, Bitcoin may gain appeal as a **digital gold** alternative, especially in regions facing currency instability.