Israel and Iran Tensions Rise As Bitcoin Reacts

The broader Crypto currency sector has taken quite a large hit over the past two days none more so than Bitcoin itself and much like every other financial market decentralised assets perform the same way when there are global issues occurring. This recent spate of decline has been attributed to none other than the current risk of war between Israel and Iran

As tensions continue to escalate amongst the region markets are on high alert as a core issue when it comes to digital assets unlike cash, gold and silver is that they are heavily reliant on infrastructure such as power, internet and stable connections. War is not good for decentralised assets, while people can put assets into offline wallets to be accessed at a later date. Mining becomes impacted by unstable energy infrastructure and fluctuating energy costs.

Today we’re going to breakdown some of the core issues currently present and hope it all settles down as we continue to see high tensions across the globe between many nations, no doubt all brought on by the current economic crisis where many are struggling to put food on the table.

Global stability is needed soon enough, lets hope it is achieved prior to a breakout of world war III

Bitcoin Reaction

Bitcoin and the broader crypto currency market have experienced a significant downturn following heightened tensions between Israel and Iran. The conflict sparked by Iran's alleged retaliatory attack on Israel by use of drones has sent shockwaves through global markets with Bitcoin suffering a sharp decline in value.

On April 13 Bitcoin's price plummeted as Israel's military reported that Iran had launched "dozens" of drones toward its territory. This news sent shockwaves through the crypto market with Bitcoin's price dropping from over USD 70,000 earlier in the week to around USD 60,000 per Bitcoin.

The repercussions were felt across the crypto currency sector as other major coins such as Ethereum, BNB, XRP, Solana and Dogecoin also experienced significant declines. The combined market capitalisation of crypto currencies saw a staggering USD 500 billion wiped out as a result of the crash.

Geopolitical Impacts

The geopolitical tensions between Israel and Iran have been escalating with Iran allegedly retaliating against Israel for an attack on its Syria consulate earlier in the month. This retaliation coupled with United States President Joe Biden's commitment to support Israel has heightened fears of a full scale conflict in the Middle East.

Bitcoin's drastic drop in value can be attributed to the uncertainty surrounding the geopolitical situation. Rajat Soni a bitcoin focused chartered financial analyst commented on the situation, stating that "Bitcoin dropped like a rock in response to the Iran/Israel news." Soni noted that Bitcoin's continuous trading availability unlike traditional stock markets allowed for an immediate reaction to the escalating tensions.

So while the weekend market saw instant significant price drops we can anticipate that Monday Wall St markets will have a similar pattern and commence reacting to the escalating threat of war in the middle east.

Hope For Peace

The impact of the Israel and Iran conflict extended beyond the crypto currency market affecting other asset classes as well. The price of Brent crude oil surged to around USD 90 per barrel amid concerns that a Middle East war could disrupt the global supply chain. The price of gold, a traditional safe haven asset, reached record highs climbing by 10% over the past month.

The conflict between Iran and Israel has been brewing for some time with tensions escalating since the October 7 attack on Israel by Gaza's Hamas. The involvement of the United States who has been pledging unwavering support for Israel further complicates the situation and raises concerns about the potential for a broader regional conflict.

As the situation in the Middle East continues to unfold, investors are closely monitoring developments and assessing the impact on various asset classes, including cryptocurrencies. The volatility in the crypto market underscores the interconnectedness of global events and highlights the importance of geopolitical stability in shaping investment strategies.

Bitcoin's sharp decline in response to escalating tensions between Israel and Iran shows how connected to mainstream markets the crypto currency market is and it’s sensitivity to geopolitical events. As the conflict unfolds, we hope that a solution can be achieved because war only hurts innocent people the most. Let the be peace across the world and safety to all.

Image sources provided supplemented by Canva Pro Subscription. This is not financial advice and readers are advised to undertake their own research or seek professional financial services.

Posted Using InLeo Alpha