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Bitcoin Price Drops Deeper as Iran Rains Missiles on Israel, Raising Global Tensions

Impact of Iran’s massive air attack on the cryptocurrency market

Cryptocurrency markets react sharply with Bitcoin leading a major sell-off after an escalation in Middle East conflicts.

Key takeaways:

  • Bitcoin dropped 8.4% following geopolitical escalations in the Middle East.
  • The global crypto market cap fell by 8.19%, reflecting widespread impacts across all major cryptocurrencies.

On April 13, the price of Bitcoin saw a sharp decline, plummeting over 8.4% from approximately $67,000 to $61,625. This drop erased over $130 million from its market capitalization in the immediate aftermath of an attack by Iran on Israel. The wider cryptocurrency market also felt the repercussions of this geopolitical tension, with Ether falling 9.81% to $2,927 and Solana dropping 15.96% to $129, as per the latest CoinMarketCap data. Overall, the global crypto market capitalization decreased by 8.19% to $2.23 trillion.

According to Bloomberg, this market movement occurred after Iran deployed drones towards Israel on Saturday, a retaliation for a previous Israeli airstrike on a diplomatic compound in Damascus, Syria, which resulted in the death of seven Iranians, including two generals.

Responses from global leaders and market analysts

In the wake of these developments, United States President Joe Biden commented on the situation, emphasizing the U.S.'s commitment to Israel's defense. 

President Biden warned on April 12, anticipating further escalations:

"We are devoted to the defense of Israel. We will support Israel, we will help defend Israel, and Iran will not succeed," He underscored that attacks from Iran could occur "sooner than later."

Further complicating matters, U.S. officials have expressed concerns over Israel’s approach to escalating tensions, urging restraint in their responses to Iran. A government source cited by CNN revealed that U.S. officials were frustrated with Israel's lack of communication about their plans. 

A U.S. official stated:

“We were not aware that Israel was going to carry out this airstrike in advance,” 

"Minutes before it happened and when Israeli planes were already in the air, Israel reached out to a U.S. official to say they were in the process of conducting a strike in Syria."

These geopolitical tensions not only impact regional stability but also continue to influence global financial markets, particularly the volatile cryptocurrency sector.