Bitcoin Drops 9% on U.S. Iran Airstrikes, $40 Billion Wiped Out

Bitcoin experienced a significant shakeout following confirmed reports of U.S. airstrikes on Iranian nuclear facilities, with its price dropping over 9% and wiping out more than $40 billion in market capitalization. This flash sell-off is reminiscent of a similar pattern observed in early 2024, when Bitcoin briefly declined by 12% due to Middle East tensions, only to subsequently surge to a new all-time high within weeks. Despite the initial panic among investors, historical market data suggests that geopolitical risks often trigger short-term volatility without disrupting the broader macro bull cycles.

The sell-off began almost immediately after Donald Trump announced on social media that the United States had successfully struck three Iranian nuclear sites, including Fordow and Natanz. Bitcoin’s price plummeted from above $110,000 to as low as $100,945, marking its steepest single-day decline since February. Ethereum, Solana, and BNB also posted losses, although Bitcoin remained the market leader in terms of downside volume.

Historical data from previous market cycles indicates that major geopolitical shocks frequently coincide with temporary corrections, followed by aggressive price recoveries. For instance, in January 2024, a U.S. drone strike in Syria triggered a 12% dip in Bitcoin, which was followed by a 46% rally within 21 days. Similar effects were observed in 2020 after the COVID-19 lockdown panic and in 2017 during North Korea missile tests. Analysts suggest that such shakeouts help to flush excessive leverage, trigger stop-losses, and reallocate tokens from weak hands to long-term holders. According to Glassnode, over 38% of Bitcoin trading volume in the last 24 hours involved coins moving from short-term to long-term wallets. This reaccumulation behavior often marks local bottoms, especially when driven by fear-based headlines.

Despite the recent dip, the long-term fundamentals of Bitcoin remain robust. U.S. spot Bitcoin ETFs continue to attract institutional inflows, and over $3 billion in stablecoins were issued on-chain over the last 48 hours, often a precursor to fresh market entries. In macro terms, Bitcoin’s correlation with gold has risen to 0.72, signaling its continued perception as a hedge during political instability. This correlation underscores Bitcoin's role as a safe-haven asset, similar to gold, during times of geopolitical uncertainty.