The global cryptocurrency market faced a sharp downturn early Thursday following breaking news that Israel launched a surprise military strike on Iranian territory.
The air assault, which reportedly targeted critical infrastructure in central and western Iran, sent shockwaves through financial markets — with crypto bearing the brunt of investor panic.
Market Sentiment Shaken
Bitcoin (BTC), the leading digital asset, dropped over 7% within hours, falling from $67,300 to $62,600 before rebounding slightly. Ethereum (ETH) also dipped nearly 6%, reaching lows of $3,330. Altcoins saw even steeper declines, with tokens like Solana (SOL), Avalanche (AVAX), and Polkadot (DOT) recording double-digit losses amid widespread liquidations.
According to data from CoinGlass, over $300 million worth of crypto positions were liquidated in the first four hours of the news breaking. Analysts say the sudden geopolitical escalation pushed many investors into risk-off mode, triggering massive sell-offs across spot and derivatives markets.
Israel Confirms Preemptive Strike
Israeli Defense Forces (IDF) confirmed that the early-morning operation was a “preemptive measure” in response to alleged threats from Iranian drone and missile units. The government has not released full details, but international agencies have reported that the targets included military facilities suspected of coordinating regional operations.
Iranian state media acknowledged the attacks but claimed only minor damage. The regime warned of “severe consequences” and has since escalated air defense deployments across Tehran and surrounding provinces.
Crypto as a Risk Asset
The crash highlights the fragile state of investor confidence amid global instability. While cryptocurrencies have often been championed as “safe-haven assets” during inflationary periods, this event reinforces that Bitcoin and its peers still behave like high-risk assets during geopolitical tensions.
“Bitcoin’s volatility during crisis events shows it hasn’t fully decoupled from broader risk markets,” said analyst Michael Van de Poppe in a morning post on X. “This was a knee-jerk sell-off, but fundamentals remain intact unless tensions spiral further.”
Next Steps for the Market
At press time, the crypto market has shown signs of stabilization, with Bitcoin holding above $63,000 and total market cap recovering from a $130 billion drop earlier in the day.
Investors are now closely watching how Iran responds and whether the conflict expands into neighboring regions. Meanwhile, stablecoin inflows into exchanges have surged, indicating traders are preparing for heightened volatility in the coming days.
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