The cryptocurrency market saw a sharp sell-off over the past 24 hours, wiping out nearly $80 billion in total market value after fresh reports of US military strikes targeting Iran.
According to reports, the US military launched new defensive strikes late Wednesday against an Iranian military position and intercepted several Iranian attack drones near the Strait of Hormuz, one of the world’s most important oil shipping routes.
A US official told Reuters that the actions were intended to protect regional security and maintain the current ceasefire conditions. In response, Iran’s Islamic Revolutionary Guard Corps reportedly claimed responsibility for attacks targeting a US airbase in Kuwait.
The escalation came while negotiations aimed at ending the conflict were still ongoing. US President Donald Trump also increased market uncertainty after stating during a White House cabinet meeting that he was “not satisfied” with the current deal discussions involving Iran, while hinting that additional military action could still happen.
Crypto Markets React Sharply
The renewed geopolitical tensions triggered a broad risk-off reaction across global financial markets, with cryptocurrencies experiencing one of the strongest declines.
The total crypto market capitalization dropped to its lowest level since mid-April after investors rapidly reduced exposure to risk assets.
Bitcoin fell roughly 3.5% during the sell-off, dropping to around $72,646 on Coinbase, marking its lowest price level since April 13.
Ethereum also came under heavy pressure, sliding more than 4% and falling below the important psychological $2,000 level. ETH dropped to approximately $1,976, reaching its weakest level since late March.
Analysts Say Geopolitical Risk Is Driving Markets
Nick Ruck, director at LVRG Research, said investors are reacting to growing concerns over:
- Rising geopolitical tensions
- Possible disruptions to global oil supply
- Inflation risks
- Potential changes to Federal Reserve policy
According to Ruck, despite long-term narratives positioning Bitcoin and Ethereum as alternative hedge assets, they continue behaving more like high-risk growth assets during periods of global uncertainty.
As tensions rise, traders are closely monitoring whether the Middle East conflict could:
- Impact energy markets
- Push inflation higher
- Reduce market liquidity
- Trigger more liquidations across leveraged crypto positions
Oil Prices Also Surge
The military developments also affected energy markets.
Crude oil prices jumped sharply after the strikes:
- WTI crude rose above $92 per barrel
- Brent crude climbed near $98 per barrel
Higher oil prices have increased concerns that inflation pressures could return globally, potentially making central banks more cautious about cutting interest rates.
Broader Risk Sentiment Weakens
The latest market reaction highlights how sensitive crypto markets remain to major geopolitical events.
Earlier this week, digital assets had rallied after Trump hinted that a peace agreement with Iran could soon be finalized. However, the renewed military escalation quickly reversed investor optimism and triggered another wave of selling pressure across both crypto and traditional markets.
With traders now watching closely for further developments in the Middle East, volatility across Bitcoin, Ethereum, and broader crypto markets is expected to remain elevated in the near term.
