Smaller coins had over a 10% increase in value, such as Uniswap and Polkadot. The crisis in the region entered a hazardous new chapter when Iran sent assault drones and missiles on Israel, purportedly in reprisal for a strike in Syria that claimed the lives of senior Iranian military leaders. 

Cryptocurrency Bets

Because Iran acted when the majority of markets were closed, cryptocurrency traders were in a unique position where they were among the first to respond to a significant geopolitical event.

According to David Lawant, head of research at FalconX, “more investors than usual might be choosing to express their market views through crypto.”

The tension weakened equities on Friday and strengthened safe havens like Treasuries and the currency as Israel braced for a strike.

According to Coin Glass statistics, one of the largest two-day liquidations in at least six months occurred on Friday and Saturday, wiping away almost $1.5 billion in bullish cryptocurrency bets made through derivatives.

In the last three days, leverage “has gotten completely overwhelmed, so that’s caused prices to materially deteriorate” in digital assets, according to Ebtikar. On Sunday, most Middle Eastern stock markets saw losses.

Military Confrontation

As of 8:36 a.m. London time, Israel’s stocks gave up their early gains and were trading little down.

The idea that Bitcoin and other crypto assets provide a refuge during times of conflict—a viewpoint frequently voiced by supporters of the asset class—would be put to the test by a significant military confrontation between Israel and Iran.

Cryptocurrencies were only beginning to see a market collapse that would endure until the end of 2022 when Russia invaded Ukraine in the early months of that year. Bitcoin has dropped from its peak of $73,798 set in mid-March.

The coin reached an all-time high due to demand for specific US exchange-traded funds that made their debut in January, although net inflows into the products have recently decreased.

The so-called Bitcoin halving, which is anticipated on April 20 and would cut the token’s new supply in half, is eagerly anticipated by cryptocurrency traders. The halving has historically proven advantageous.