Crypto Crash Alert: US-Iran Tensions Ignite Market Turmoil

crypto Prices Plummet Amid Iran-U.S. Tensions

The crypto market took a hit over the weekend as tensions between the U.S. and Iran escalated. President Trump ordered airstrikes on Iran’s nuclear facilities, sparking global unease. The U.S. and Israel teamed up to strike three key sites,aiming to halt Iran’s nuclear ambitions. Trump declared the mission successful, but Iran promised retaliation.

Bitcoin’s price fell below $103,000, with other top coins like Virtuals Protocol, Celestia, AB, and Aptos also suffering losses.The total crypto market value slid by 1.65%, reaching $3.15 trillion. Liquidations soared by 38%, totaling over $682 million. This geopolitical turmoil sent shockwaves through financial markets.

Investors fled risky assets, including cryptocurrencies. Bitcoin led the decline, with major altcoins following suit. The market capitalization of all tracked cryptos dropped sharply. The fallout from the attacks has fueled uncertainty, causing a mass sell-off.

Historically, such events trigger a risk-off mood. People prefer safer investments during crises.In April, similar market reactions occurred when Trump imposed tariffs. The same happened in March 2020 after the COVID pandemic started, and in February 2022 after Russia invaded Ukraine. In a note to Bloomberg, Hanain Malik of Tellimer said: “Short-term, markets such as crude oil, stocks, and crypto will pivot on whether Iran retaliates and widens the war in a way that impacts oil supply versus backing down and offering concessions on its nuclear program.” Crisis in Iran may lead to higher inflation The other main reason the crypto market crashed is that the Middle Eastern crisis could lead to higher crude oil and shipping prices. Brent and West Texas Intermediate oil benchmarks have already jumped by over 32% from the year-to-date low, and analysts anticipate rising prices. shipping costs have also jumped. The implication is that consumer inflation in the U.S.may keep rising, which will prevent the Federal Reserve from cutting interest rates.  In its meeting last week, the bank left interest rates unchanged between 4.25% and 4.50%. It hinted that it will deliver two cuts this year and four in 2026 and 2027. Bitcoin and other altcoins do well when the Fed is cutting interest rates.