Bitcoin Drops as Geopolitical Tensions Rise Over Iran

Bitcoin (BTC) has fallen by 3.8% in the last 24 hours, trading below $104,000 again. The CoinDesk 20, which tracks the top 20 cryptocurrencies by market cap, excluding stablecoins, exchange tokens, and meme coins, has lost 6.1% in the same period. Ethereum (ETH) and Solana (SOL) both saw declines of 7%, while Sui (SUI) dropped almost 10%. 

Crypto-related stocks are also feeling the impact, with Coinbase (COIN), MicroStrategy (MSTR), and Circle (CRLC) each falling by 2%-3%. Bitcoin miners such as Bitdeer (BTDR), Riot Platforms (RIOT), CleanSpark (CLSK), HIVE (HIVE), and Hut 8 (HUT) are down 6%-7%.

The market downturn is largely attributed to rising geopolitical tensions. President Donald Trump recently suggested that the U.S. may get involved in the escalating conflict between Iran and Israel. Trump made a statement on social media, claiming that the U.S. knows the exact location of Iran's Supreme Leader, Ali Khamenei, and could potentially target him, though he clarified the threat is not immediate. Trump also called for Iran to surrender and urged the evacuation of Tehran. In response, the White House convened a national security council meeting, and Trump cut short a G7 summit to address the situation.

The odds of U.S. military action against Iran before July have surged to 65%, according to Polymarket.

Javier Rodriguez-Alarcón, Chief Investment Officer at XBTO, noted that the geopolitical situation is highly uncertain and has triggered a risk-off sentiment in the market. He added that a de-escalation could encourage risk-on behavior, while further deterioration could lead to additional declines across risk assets.

Matteo Greco, senior analyst at Finequia, echoed this view, explaining that the conflict could have a significant impact on the U.S. economic outlook. If Israeli military action affects Iran’s oil production, it could cause a spike in oil prices, which would drive up inflation and put further pressure on the U.S. economy.