At around 1:00 a.m. local time on June 13th, the Israeli Ministry of Defense announced a strike against Iran, and subsequently, continuous explosions were heard in Tehran, the capital of Iran. Affected by the escalation of this geopolitical conflict, the global financial market has fluctuated sharply, and the prices of Bitcoin and other cryptocurrencies have depreciated significantly.
In the cryptocurrency market, the price of Bitcoin has dropped rapidly. Within hours of the news of the air strike, the price of Bitcoin dropped by more than 6% at one point, falling from around $28,000 to a low of around $26,200. Other mainstream cryptocurrencies such as Ethereum were not spared either. The price of Ethereum dropped by more than 8%, and many smaller-cap cryptocurrencies even experienced double-digit declines. For instance, the price of Solana (SOL) dropped by 15%, and that of Cardano (ADA) also fell by 12%.
The sharp decline in the cryptocurrency market is closely related to the concentrated outbreak of investor panic. Israel’s air strikes against Iran have sharply increased geopolitical risks in the Middle East. Under the shadow of uncertainty, investors are selling off their cryptocurrency assets and turning to more traditional safe-haven assets such as gold, the US dollar and US Treasury bonds. According to CoinGlass data, within 24 hours after Israel launched air strikes, more than 1.5 billion US dollars of long positions in the cryptocurrency market were forcibly closed out, with a large number of investors leaving the market with margin calls, further intensifying the selling pressure in the market.
Previously, the market had placed high hopes on cryptocurrencies as safe-haven assets, comparing Bitcoin to “digital gold”. However, in the recent Israeli air strike on Iran, the performance of the cryptocurrency market was quite different from expectations. In sharp contrast, the prices of traditional safe-haven assets have risen sharply. The increase in spot gold prices expanded to 1%, once hitting a new high since May 7th, reaching a high of $2,036 per ounce. The US dollar index also rose significantly, with an intraday increase of 0.5%. International oil prices have soared even more. Us crude oil once rose by more than 6%, and Brent crude oil rose by more than 5%.
Some analysts point out that the decline of the cryptocurrency market also reflects its vulnerability in the face of major geopolitical crises. Compared with traditional financial markets, the cryptocurrency market lacks effective regulatory mechanisms and stable fundamental support, and is more susceptible to market sentiment and unexpected events. Although cryptocurrencies have developed rapidly in recent years, they still need to overcome many challenges before they can truly become reliable safe-haven assets, such as market manipulation and regulatory uncertainty.
As the conflict between Israel and Iran continues, the future trend of the cryptocurrency market is full of uncertainties. Investors are currently closely monitoring the further development of the geopolitical situation and the possible response measures taken by governments and central banks around the world to determine when the cryptocurrency market can stabilize and rebound.
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