The cryptocurrency market experienced a significant downturn as geopolitical tensions in the Middle East and looming economic decisions triggered a wave of selling. Bitcoin briefly dropped below the $60,000 mark, and Ethereum, XRP and other major cryptocurrencies tanked. The total market capitalization of all cryptocurrencies has lost over $250 billion in the past day.
Fears of possible U.S. escalation in the Israel-Iran conflict have played a role in pushing down Bitcoin’s price. Originally, closing the Strait of Hormuz was first proposed by Esmail Kosari, an Iranian lawmaker and Islamic Revolutionary Guards commander. This route has become crucial for the global oil supply. This proposal was announced just as Iran’s parliament allegedly voted to approve the shutdown.
will be done whenever necessary - Esmail Kosari, Iran lawmaker and Revolutionary Guards commander
These geopolitical factors, compounded by skyrocketing inflation and recession fears have led to uncertainty and instability in the market.
Escalation in the form of other countries getting involved and Iran blocking the Strait of Hormuz could lead to a further deterioration in global risk appetite and a rollback of [bitcoin’s] upward trend - Alex Kuptsikevich, FxPro chief market analyst
The U.S. last week allegedly hit three Iranian nuclear facilities, raising tensions even higher.
Spooked energy markets, fearing further escalation, are apt to respond to the U.S. strikes with a sharp jump in crude prices. - Ron Bousso, Reuters analyst
Compounding the current market’s volatility is the Federal Reserve’s expected hike in interest rates. The soon-to-come announcement has investors worried — adding to the generalized risk-off feeling gripping the overall crypto markets.
Donald Trump just recently validated one of the biggest, world-altering game-changers for crypto prices. Those same experts predict that $10 trillion could flood into the calamitized Bitcoin market—including that $21 trillion in dumb money. Coinbase recently released a $130 billion ‘systemic’ Bitcoin price alert.
Tracy Jin, COO of MEXC described the ongoing collapse as a “major risk to look out for.”
For crypto traders and investors looking to chart a course through these stormy waters, Forbes CryptoCodex newsletter is a great place to start.
