Crypto Markets Plunge 7% Amid Geopolitical Tensions

Crypto markets experienced a significant downturn, with over $190 billion exiting the markets within the past 12 hours. This resulted in a 7% decrease in total capitalization, bringing it down to $3.36 trillion. The crash was triggered by news reports of Israel launching a missile attack on Iranian nuclear sites in a pre-emptive strike. Israel declared a state of emergency, anticipating counter-attacks in the near future. Iranian media reported that residential areas in Tehran were hit, and civilians were among the casualties. Iran has vowed a harsh response against both Israel and the US following the attacks.

The crypto market saw widespread liquidations, with $1 billion in liquidations occurring over the past 12 hours. Nearly 250,000 traders were liquidated over the past 24 hours, with over 90% of these positions being long, primarily in Bitcoin and Ethereum. Bitcoin experienced a sharp decline, dropping from an intraday high of $108,350 to a low of $103,000 during Asian trading on Friday morning. It later found support and reclaimed $104,000. Ethereum also saw a significant drop, falling from $2,760 to $2,470 within hours, before recovering to just above $2,500. Altcoins such as Solana, Dogecoin, and Cardano also suffered substantial losses, with Solana dropping 12%, Dogecoin falling 10%, and Cardano declining 9.5%. Other altcoins, including Sui, Chainlink, Avalanche, Shiba Inu, and Hedera, also experienced notable declines. However, BNB and Tron saw relatively minor dips of a few percentage points.

Despite the geopolitical tensions driving the market downturn, there remains a bullish outlook for the crypto market. Investors often turn to safe-haven assets during periods of turmoil, and Bitcoin is frequently seen as one such asset. Former hedge fund manager James Lavish noted that during times of geopolitical conflict, investors typically seek refuge in fiat-based sovereign debt, which ultimately leads to money printing and monetary debasement. He advised that smart investors should instead turn to assets that cannot be debased, with Bitcoin being the smartest choice. The pro-crypto narrative in the United States continues to strengthen, with the Securities and Exchange Commission withdrawing a set of rules from the Gary Gensler era on June 12. Additionally, the US and China struck a trade deal this week, easing tariff tensions. However, benchmark Brent crude oil prices spiked by more than 8%, and gold prices rose to $3,440 per ounce amid fears of escalating conflict.