The cryptocurrency market experienced significant losses overnight Saturday following an unprecedented drone and missile attack by Iran on Israel, sparking heightened geopolitical tensions. Bitcoin, a leading indicator in the digital currency market, witnessed an 8% drop in value as the news broke, with prices plummeting from around $70,000 to below $62,000 in a matter of hours, according to Bitstamp exchange data.
This decline marked one of the steepest sell-offs for Bitcoin in over a year, occurring in a context where cryptocurrencies often trade actively over weekends, unlike traditional markets. By Sunday morning, Bitcoin had somewhat recovered, trading above $64,000, although the volatility remained high. Ethereum and other major cryptocurrencies also faced sharp declines, with some recording up to a 10% drop.
The sell-off reflects investors’ immediate reaction to the escalation of tensions in the Middle East. The direct attack from Iranian territory on Israel is a significant escalation in the region’s ongoing conflicts, with Israel reporting that it had successfully intercepted 99% of the 300 identified threats.
The geopolitical unrest also impacted regional currencies and stock markets, with the Iranian rial hitting a record low of 705,000 rials to the US dollar on the unofficial market. Meanwhile, Israel’s TA-35 index saw a modest decline of 0.38% in early trading.
This recent turmoil underscores the sensitivity of cryptocurrency markets to global events, highlighting their role as alternative assets susceptible to swift shifts in investor sentiment amid international crises.
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