Rising geopolitical tensions in the Middle East have triggered a significant shakeup in the cryptocurrency market, with $489 million in liquidations over the past 24 hours.
This comes as Iran launched airstrikes on Israel following Israel’s ground operations in Lebanon.
The uncertainty caused by these events has led to a sharp decline in the value of Bitcoin (BTC) and other major cryptocurrencies.
Bitcoin dropped by 3%, trading at $61,598, while Ethereum (ETH) and Solana (SOL) suffered even larger losses, down by 4.31% and 5.51%, respectively.
Dogecoin (DOGE) and Toncoin (TON) registered the worst performances, plunging by over 6%.
The liquidations primarily impacted long positions, accounting for $416.6 million, while short positions saw roughly $73 million in liquidations.
According to Coinglass data, most of the liquidations occurred within a four-hour window as the situation in the Middle East escalated.
Not only did the crypto market face heavy losses, but traditional financial markets also took a hit. The S&P 500 fell by 1.1%, while the Nasdaq dropped 1.85%.
Meanwhile, investors flocked to safe-haven assets such as gold and the US dollar, with the US Dollar Index rising 0.6% and the Philadelphia Gold and Silver Index climbing by 1.1%.
According to Jeroen Blokland, founder of Blokland Smart Multi-Asset Fund, investors are selling Bitcoin to buy gold, viewing it as a safer option during times of geopolitical unrest.
However, Blokland pointed out that Bitcoin has historically performed well during global crises, outperforming traditional assets like the S&P 500 and gold in past events such as the US-Iran conflict, the Russia-Ukraine war, and the COVID-19 pandemic.
