The U.S. may soon go to war against Iran, and crypto markets aren’t liking the prospect.
Bitcoin BTC is down 3.8% in the last 24 hours, trading under $104,000 yet again. The CoinDesk 20 — an index of the top 20 cryptocurrencies by market capitalization, excluding stablecoins, exchange coins and memecoins — lost 6.1% in the same period of time, with ether ETH and solana SOL both slumping 7% and sui SUI dipping almost 10%.
Crypto stocks are also taking a hit, with Coinbase (COIN), Strategy (MSTR) and Circle (CRLC) all down 2%-3%, and bitcoin miners such as Bitdeer (BTDR), Riot Platforms (RIOT), CleanSpark (CLSK), HIVE (HIVE) and Hut 8 (HUT) losing 6%-7%.
The market move came as President Donald Trump suggested that the U.S. could soon get involved in the conflict between Israel and Iran.
“We know exactly where the so-called ‘Supreme Leader’ is hiding,” Trump posted on social media, referring to Iranian head of state Ali Khamenei. “He is an easy target, but he is safe there – we are not going to take him out (kill!), at least not for now. But we don’t want missiles shot at civilians, or American soldiers. Our patience is wearing thin.”
Trump also called for Iran to surrender unconditionally, and for residents of Tehran to evacuate the city. The national security council was convened, according to the White House, and Trump himself cut short a G7 summit to focus on the issue.
Odds of U.S. military action against Iran before July have soared to 65% on Polymarket.
“The sudden and severe escalation of the Iran-Israel conflict introduced a significant geopolitical risk premium, prompting an immediate flight from risk assets across the board, to which crypto has not proven immune,” said Javier Rodriguez-Alarcón, Chief Investment Officer at XBTO.
“The geopolitical situation remains a wildcard; any credible de-escalation in the Middle East could serve as a significant risk-on catalyst, while a further deterioration would likely trigger another move down across risk assets,” he added.
Matteo Greco, senior analyst at Finequia, shared the same sentiment, adding that the war could end up having significant consequences on the U.S. economic outlook. “Should Israeli military actions impact Iran’s oil production, a spike in oil prices could follow, fueling renewed inflationary pressures,” Greco said.