Bitcoin Drops 6% Amid Israel-Iran Tensions

Bitcoin's value experienced a significant decline following Israel's military strikes on Iran's nuclear and military facilities on June 13, 2025. The geopolitical tension led to a sharp sell-off in the cryptocurrency market, with Bitcoin's price dropping to approximately $103,162 before stabilizing near $108,450. This event underscored the susceptibility of cryptocurrencies to geopolitical events, as major assets sold off in response to the escalating conflict.

Israel's military operation, ordered by Prime Minister Benjamin Netanyahu, aimed to neutralize threats from Iran, aligning with his historical stance. The action prompted traders to move funds to perceived safe havens such as the U.S. dollar and Treasuries, reflecting a broader market reaction to geopolitical risks. Lucas McCarthy, a strategist, suggested that Bitcoin is still behaving more like a high-risk tech stock than a geopolitical hedge, as investors preferred traditional safe havens over digital assets.

The impact of the airstrikes was not limited to Bitcoin; other major cryptocurrencies such as Ethereum and XRP also experienced declines. The political maneuver intensified demand for traditional safe havens, contrasting with digital asset volatility. The dollar and Treasuries gained strength, underscoring macroeconomic influences on crypto investments. This incident reflects parallel trends seen during past geopolitical events, where cryptocurrencies initially decline before subsequent stabilization.

Historical data suggests that such events have often been followed by substantial gains in Bitcoin's value, indicating that the recent dip could present a buying opportunity for investors. Analysts have pointed out that Bitcoin has historically performed well following major geopolitical events. Data from various sources, including CryptoQuant and Glassnode, suggests that Bitcoin is currently in buy territory. The Puell Multiple, which tracks miners’ daily revenue against the annual average, lingers near the discount zone below 1.40, despite Bitcoin’s recent peak above $108,000. This rare divergence signals undervaluation and suggests the market is driven by institutional demand or tightening supply, not miner selling pressure.

Additionally, Glassnode data shows Bitcoin is currently trading between key short-term cost basis (CB) with its 1-week CB at $106,200, 1-month at $105,200, 3-month at $98,300 and 6-month at $97,000. The BTC cost basis represents the average price at which investors acquired their Bitcoin over a specific period. With most holders in profit, the risk of panic selling remains low, but it could change over the next few weeks. These metrics—a discounted Puell Multiple and resilient cost basis—highlight a robust foundation for recovery, suggesting that the current dip could be a prime opportunity for investors eyeing Bitcoin’s next upward move.

Following the initial drop, Bitcoin rebounded to around $106,000, although it remained 6% below its all-time high. The broader crypto market also saw declines, with the global market cap falling by $60 billion. Despite the volatility, analysts remain optimistic about Bitcoin's long-term prospects, citing historical patterns and current market conditions as indicators of potential future gains. The recent escalation in the Israel-Iran conflict has added to the market's uncertainty, but Bitcoin's resilience and historical performance during similar events suggest that the current dip could be a temporary setback.