The prices of bitcoin and other major cryptocurrencies plummeted on Saturday, after Iran launched a drone attack against Israel, sharply escalating geopolitical tensions in the Middle East.
Bitcoin’s price fell over 8% in less than an hour, dropping from around $67,000 to $61,625. Ethereum dropped 9.8% to $2,927, while Solana sank nearly 16% to $129. The global crypto market capitalization declined by 8.2% to $2.23 trillion, wiping out over $130 billion in value.
The selloff came after reports that Iran had launched “dozens” of drones towards Israel in retaliation for an Israeli airstrike days earlier that killed 7 Iranians, including two generals, at a diplomatic compound in Damascus, Syria. The U.S. had reportedly been urging Israel not to escalate tensions.
While the events are not directly tied to cryptocurrencies, traditional markets were closed on Saturday, leaving crypto as one of the few globally traded assets to immediately react to the geopolitical shockwave. Crypto has previously exhibited sensitivity to major news events that impact investor risk appetite.
The crypto plunge follows a recent rally that had seen bitcoin hit a new all-time high price of $73,750 on March 24th. Analysts had cited rising geopolitical risks, including the potential for higher oil prices impacting the global economy, as a key concern prior to this weekend’s events.
U.S. President Joe Biden warned on April 12th that Iran would likely attack “sooner or later” and stated the U.S. remains “devoted to the defense of Israel” against Iranian aggression. However, U.S. officials also expressed frustration at Israel for only providing last-minute notification about the Damascus airstrike after planes were already en route.
