Bitcoin falls sharply as strikes begin on Iran

Bitcoin falls sharply as strikes begin on Iran

Bitcoin Falls Sharply as Geopolitical Tensions Escalate Amid U.S.-Iran Conflict

Bitcoin (BTC-USD) experienced a significant decline as escalating U.S.-Iran tensions triggered a risk-off sentiment across global markets. On February 28, 2026, Bitcoin traded below $63,000, down over 5% from earlier in the week, amid fears of military escalation in the Middle East. The cryptocurrency's price has retreated from its October 2025 peak of $126,000, marking a nearly 50% correction since its high.

The U.S. has intensified its military presence in the region, amassing its largest concentration of air power in the Middle East since the 2003 Iraq invasion. President Donald Trump has signaled potential military action against Iran, with top national security advisers instructed to prepare assets for deployment by mid-March. Analysts attribute Bitcoin's decline to a broader flight to safety, with investors shifting capital to traditional safe-haven assets like gold and the U.S. dollar.

Iran's surging crypto activity has also drawn scrutiny amid sanctions and currency devaluation. Blockchain analysis firms estimate Iranian crypto transactions reached $7.8 billion in 2025, with 50% of flows linked to the Islamic Revolutionary Guard Corps (IRGC). U.S. Treasury officials are investigating whether crypto platforms facilitate sanctions evasion, as Iranians increasingly use digital assets to bypass financial restrictions.

Derivatives markets reflect heightened volatility, with traders seeking downside protection through Bitcoin options and futures. On-chain data indicates increased withdrawals of Bitcoin to personal wallets in Iran during periods of political unrest, suggesting crypto's role as a hedge against economic instability.

While short-term uncertainty persists, some analysts argue Bitcoin's sensitivity to macroeconomic conditions may stabilize post-conflict. However, with geopolitical tensions and sanctions pressures unresolved, digital assets remain vulnerable to further volatility. Investors are closely monitoring diplomatic developments in Oman, where talks could influence the trajectory of both the geopolitical crisis and crypto markets.

(https://uk.finance.yahoo.com/news/bitcoin-price-us-iran-tensions-risk-assets-100515326.html): Yahoo Finance, CNBC
(https://www.cnbc.com/2026/02/24/bitcoin-extends-decline-falling-below-64000-btc-trump-tariffs-ai-crypto.html): CNBC
(https://www.reuters.com/business/finance/irans-surging-crypto-activity-draws-us-scrutiny-2026-02-03/): Reuters
(https://www.chainalysis.com/blog/iranian-crypto-activity-geopolitical-tensions-2026/): Chainalysis, TRM Labs
(https://finance.yahoo.com/news/war-iran-almost-certain-might-093056540.html): Yahoo Finance, Polymarket