Bitcoin in the War: How Does a Geopolitical Crisis Trigger Systemic Fluctuations in the Cryptocurrency Market?
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On June 13, 2025, Israel launched an air strike on military and nuclear facilities in Iran, marking the return of high tensions in the Middle East. This raid not only impacted the traditional Financial Market, but also pushed the cryptocurrency market into a violent abyss. According to MEXC data, Bitcoin fell nearly 4% at one point, and Ethereumlost key support , with a 24-hour margin call exceeding $1.10 billion. In the turbulent international situation, cryptoassets are becoming more and more like a mirror, reflecting the panic and flow of global capital.
1. Middle East war reignites: Crypto market encounters systemic risk release
Israel's military strike on Iran's homeland triggered a rapid rise in safe-haven assets such as crude oil, gold, and US bonds. At the same time, the cryptocurrency market experienced violent fluctuations in just a few hours: BTC fell below $106,000, ETH fell below $2,500, Solana , TON and other popular assets fell sharply synchronously.
Such non-economic "Black Swan events" often have suddenness and spillover, which can easily trigger a rapid shift in market sentiment and amplify the stampede effect of the leveraged market. Data shows that on that day, the liquidation amount of long contracts exceeded $800 million, and investors' misjudgment of the "war bullish" narrative became one of the core inducements for this decline.
This incident is not isolated. Since the outbreak of the Russia-Ukraine war in 2022, geopolitical conflicts have become an important variable affecting the volatility of the cryptocurrency market.
- During the 2023 Israeli-Palestinian conflict, Israel banned wallet addresses related to Hamas, triggering intense discussions on "on-chain compliance" and "decentralized regulation". Gaza residents used stablecoins to cross borders to evade currency depreciation.
Geopolitical conflicts have made cryptoassets play a role in multiple dimensions: both as speculative risk assets and gradually becoming wartime private financial instruments and asset transfer channels. Their role in conflicts is becoming increasingly complex and subtle.
2. "Digital gold" or "speculative asset"? Bitcoin's safe-haven attribute is being questioned again
In theory, Bitcoin is called "digital gold" due to its scarcity and non-sovereign attributes, but whenever the Black Swan comes, its price volatility is much higher than that of gold and US Treasury bonds. This reflects the divergence in the market's positioning of Bitcoin: traditional institutions still regard it as a highly volatile and risky asset, and are more inclined to reduce holdings in risk events rather than increase allocations. In contrast, traditional assets such as gold, the US dollar, and crude oil are still safe havens for funds.
In the current Israel-Iran conflict, Bitcoin has fallen significantly more than gold, indicating that its safe-haven function has not yet formed a consensus in the mainstream market.
According to CoinGlass data, if the price of Bitcoin falls below $100,000, more than $1.74 billion of long positions will face liquidation. This potential liquidation effect will trigger a chain reaction and become the "tipping point" that impacts the entire crypto ecosystem.
Meanwhile, different signals have emerged in the Ethereum market. According to MEXC data, the performance of ETH has been significantly weak after the conflict broke out, falling more than 10% in seven days, hitting a low of $2,454, and now rebounding to $2,575. What is more alarming is that the spot Ethereum ETF saw a net outflow of $2.10 million on Friday, ending the positive inflow trend for 19 consecutive trading days. This means that the safe-haven sentiment of Ethereum investors may have quietly risen, and funds are looking for more stable asset shelters.
3. Derivatives and Mismatch Narratives: The "Structural Fragility" of Leveraged Markets
The market crash also exposed an old problem: the concentration of derivative leverage and the mismatch of market expectations.
Many investors bet on the rise of BTC on the "good news of war" and chased after the news of the air raid, only to be reversed by the main funds, triggering a wave of liquidation. This situation is common in the cryptocurrency market, attributed to its high leverage structure and speculative culture driven by excessive narrative.
When expectations and reality are misaligned, leverage magnifies the decline into an avalanche, which is why every "major event" is accompanied by large-scale liquidation.
4. Stablecoins and War Zone Finance: The Grey Uses and Potential Value of Crypto Tools
It is worth noting that the actual use of stablecoinsin war zones is on the rise. Whether it is the USDT donation address released by the Ukrainian government or the transfer of funds through the Tron network in the Gaza Strip, cryptocurrency plays an "informal but usable" role in the dysfunctional financial system.
Although this has also raised concerns among regulators about "illegal financing" and "money laundering", it is precisely this availability in the gray area that has gradually revealed the survival space of encrypted finance in the war.
5. Future trends: A macro perspective on the structure of the crypto market
The sudden change in the situation in the Middle East reminds us once again that the crypto market is no longer just a place for technological innovation and the game of Monetary Policy. It is becoming an indispensable part of the global macro-political and economic landscape.
Future market participants must face the following three core propositions:
- How to understand the multiple roles of encrypted assets : is it a speculative tool? Is it a safe-haven asset? Is it a war zone financial transit station?
- How does geopolitics affect risk pricing : cyclical shocks or structural variables?
- Decentralized Finance (DeFi) Can It Cross Geopolitical Barriers : In a world divided by censorship, sanctions and policy, is there a truly "free passage" for crypto assets?
6. Conclusion
The reignition of the Middle East war has sounded a new alarm for the cryptocurrency market. Black Swan not only exists in inflation data, interest rate decisions, and regulatory policies, but also lurks in every unexploded missile and geopolitical rift.
The true way to survive is not to bet on every good or panic, but to understand the macro logic and non-market factors behind the cryptocurrency market. In the uncertain future, how to use diversified strategies to protect capital and capture new opportunities will be a topic that every investor needs to consider.
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