As Israel and Iran exchanged missile fire for the fourth consecutive day, key cryptocurrencies notched gains with Bitcoin climbing close to $109,000 at the end of Monday 16 June (UTC).
As Israel and Iran exchanged missile fire for the fourth consecutive day, key cryptocurrencies notched gains with Bitcoin climbing close to $109,000 at the end of Monday 16 June (UTC).
In addition to Bitcoin’s advance of 5.4 percent since Friday’s low, Ethereum, Tether and XRP all posted an increase.
Devastating strikes
Digital assets plunged during the first 24 hours after the Israeli Air Force began a series of devastating strikes against Iranian infrastructure and military command centres. The onslaught began on the night of Thursday 12 to Friday 13 June.
The sell-off wiped out $420 billion from the total crypto market cap and triggered $1.2 billion in leveraged liquidations, according to CoinGlass, a cryptocurrency analytics firm. When markets drop sharply, exchanges may call in the collateral that traders post when they borrow in search of inflated gains from larger volumes.
War drums beat
Since the first Israeli strike, Iran has responded through a salvo of missile attacks on Israeli cities that locked the two foes in conflict. State media in Iran reported 224 civilians killed, with Israel announcing 24 dead.
Israel attacked after the US and Iran failed to reach an agreement governing Iran’s nuclear program, which Israel views as an existential threat to its survival.
While not committing Americans to the fight, the Trump administration has openly backed Israel. Trump departed early from the G7 Summit in Canada to return to Washington and issued a thinly veiled warning via his Truth Social account that “everyone” should flee Tehran.
Predictable patterns
Bitcoin’s price has, at times, mirrored the coin’s behaviour during earlier bouts of international conflict.
For example, on 1-2 October 2024, Iran launched approximately 180 missiles at Israel. This saw Bitcoin’s price drop steeply by 6% from $64,000 to $60,200. And when Russia launched its full invasion of Ukraine, Bitcoin plunged sharply by almost 8% during the beginning of the conflict.
Business as usual?
However, Bitcoin unexpectedly rallied on Monday morning. A decisive breakout above this zone could pave the way toward a potential retest of the $110,000 level.
Analysts are looking closely for cracks in what could prove to be a turning point for Bitcoin if investors improperly mispriced geopolitical risk. Some have been hinting that the coin has become more resilient to geopolitical shocks.
“The situation in the Middle East would need to deteriorate rapidly and enter a more dangerous phase for Bitcoin to fall below $100,000,” said Kathleen Brooks, Research Director at XTB, an online investing platform, as reported by Barron’s.
