Why do wars affect cryptocurrencies?
1 Fear and Uncertainty
◦ During military escalation (such as an attack on facilities in Iran), investors retreat from high-risk assets including cryptocurrencies, shifting to “safe assets” like gold, the dollar, or bonds.
2
3 Large Liquidations
◦ During tensions, many traders use leverage, and when prices drop quickly, their positions are automatically closed, further exacerbating the price decline.
4
5 Connection to Global Markets
◦ The financial world has become interconnected, so what affects stocks and bonds can extend to the crypto market, especially during periods of general panic.
6
📊 A Real Example
• During a military escalation in June 2025 between Israel and Iran: • Bitcoin dropped from about $107,000 to $102,000. • Many altcoins lost more than 10% in the same period. • The total market lost significant value before it started to recover later after the situation calmed.
🧠 What is happening in the investor's mind?
• In times of war, the appetite for risk declines, meaning that investors sometimes refrain from buying or sell their holdings to move into safer assets.
• This does not mean that the currency has “collapsed fundamentally,” but rather that it fluctuates like other markets during times of doubt and uncertainty.
📈 Is the market recovering?
(Yes or No) !!
1 Fear and Uncertainty
◦ During military escalation (such as an attack on facilities in Iran), investors retreat from high-risk assets including cryptocurrencies, shifting to “safe assets” like gold, the dollar, or bonds.
2
3 Large Liquidations
◦ During tensions, many traders use leverage, and when prices drop quickly, their positions are automatically closed, further exacerbating the price decline.
4
5 Connection to Global Markets
◦ The financial world has become interconnected, so what affects stocks and bonds can extend to the crypto market, especially during periods of general panic.
6
📊 A Real Example
• During a military escalation in June 2025 between Israel and Iran: • Bitcoin dropped from about $107,000 to $102,000. • Many altcoins lost more than 10% in the same period. • The total market lost significant value before it started to recover later after the situation calmed.
🧠 What is happening in the investor's mind?
• In times of war, the appetite for risk declines, meaning that investors sometimes refrain from buying or sell their holdings to move into safer assets.
• This does not mean that the currency has “collapsed fundamentally,” but rather that it fluctuates like other markets during times of doubt and uncertainty.
📈 Is the market recovering?
(Yes or No) !!