Bitcoin plummets amid Iran-Israel tension: A look at the Crypto Market fallout


Bitcoin, the dominant force in the realm of cryptocurrencies, has endured a significant setback, plummeting by 7.9 percent to $61,842 at 21:00 GMT on April 13. This abrupt decline was precipitated by reports of Iran’s retaliatory drone strikes on Israel, as disclosed by Reuters. The repercussions of this event were palpable, with Bitcoin witnessing a steep drop of $5,308 from its previous closing value. However, it managed to regain some ground, settling in the $63,000 range by the morning of April 14, according to CoinDesk data.

Delving deeper into the figures reveals a broader trend of decline for Bitcoin, which now stands at 16.2 percent or $10,000 below its peak of $73,794 recorded on March 14. Analysts attribute this decline primarily to the surging demand for United States bitcoin exchange-traded funds (ETFs).

The impact of Bitcoin’s downturn has rippled throughout the cryptocurrency market, affecting major players like Ethereum, the second-largest cryptocurrency by market capitalization. Ethereum experienced a notable 9.18 percent drop to $2,930 on April 13, shedding $296.1 from its previous close. Similar downward trends were observed in other prominent coins such as Dogecoin and Solana. The broader market sentiment mirrored these declines, evident in the CoinDesk 20 Index, which tumbled by 10 percent. Notable cryptocurrencies like Cardano’s ADA, Avalanche’s AVAX, bitcoin cash, filecoin, and aptos all recorded declines ranging from 15-20 percent, as per CoinDesk data.


The turbulence in the cryptocurrency realm reflects the prevailing risk aversion triggered by escalating geopolitical tensions in the Middle East, as highlighted in a Bloomberg report. The fluidity of the situation, compounded by the continuous trading of digital assets over the weekend, leaves ample room for potential shifts before the reopening of stock markets on April 15 (Monday).

Zaheer Ebtikar, founder of crypto fund Split Capital, emphasized that the ongoing crypto sell-off could persist “contingent on further escalation,” urging market participants to exercise caution and monitor market reactions closely before making significant moves. He pointed out the excessive leverage in the market over the past three days, contributing significantly to the deterioration in digital asset prices.

The severity of the downturn is underscored by data from Coinglass, indicating approximately $1.5 billion of bullish crypto wagers via derivatives were liquidated on April 12 and 13. This represents one of the largest two-day liquidations witnessed in at least six months, as reported by Bloomberg.

In the midst of the crypto market turmoil, traditional safe-haven assets have experienced heightened demand. Treasury bonds and the US Dollar Index have seen notable gains as investors seek refuge in safer investments. Key US stock market indicators, such as the S&P500 and Nasdaq 100, witnessed a 1.7 percent drop just an hour before the trading session’s end. Gold, renowned for its status as a safe haven in times of uncertainty, surged to a new record high, surpassing $2,400, before retracing some gains. Additionally, oil prices saw a modest 1 percent increase.

Despite prevailing pessimism, investors in the crypto market are eagerly anticipating an upcoming event—the Bitcoin halving, slated for around April 20. This event will halve the rate at which new bitcoins are produced. Historically, such halving events have coincided with increased Bitcoin prices. However, doubts loom over whether this pattern will hold true, especially in light of Bitcoin’s recent peak in value.

In conclusion, the recent downturn in Bitcoin and the broader cryptocurrency market underscores the intricate interplay between geopolitical events and financial markets. As tensions persist in the Middle East, market participants remain on edge, navigating through volatile terrain with a watchful eye on potential developments and their implications for asset prices.