Middle East Tensions Spark 4.5% Bitcoin Drop 10% Ethereum Plunge

Tensions in the Middle East escalated late Thursday, causing significant disruptions in global markets. Bitcoin experienced a sharp decline, falling 4.5% in the past 24 hours and dropping below the critical $104,000 level to trade at $103,802. Ethereum faced an even more severe impact, with its value plummeting nearly 10% to $2,497.

The sudden drop in cryptocurrency valuations came in response to reports of Israeli airstrikes on Iran. Multiple explosions were reported in Tehran, with a senior Israeli military source confirming that the strikes targeted Iran’s nuclear and military infrastructure. This escalation in geopolitical instability sent shockwaves through the market, prompting a flight to safer assets.

In the wake of the airstrikes, crude oil prices surged. U.S. benchmark West Texas Intermediate (WTI) climbed 7.23% to $72.98 per barrel, while Brent crude rose 7% to $74.23 per barrel, marking the highest levels in three months. The Israeli Defense Minister declared a state of emergency, warning of an imminent missile and drone attack against Israel and its civilian population. This heightened the fears of a broader regional conflict, further exacerbating market volatility.

According to analysts, the increased geopolitical risk has led to a shift toward safer assets. Market participants are anticipating near-term pressure on crypto valuations as a result. The surge in oil prices and the sharp sell-off in the crypto market reflect the heightened uncertainty and risk aversion among investors.

For crypto investors, the escalation adds a new layer of volatility and uncertainty. Many were already navigating a fragile market, and the potential for further retaliation could trigger additional outflows, particularly from high-leverage positions. While the crypto market has shown resilience to geopolitical events in the past, the scale of the current airstrikes and the potential for broader conflict could test this resilience.