- Bitcoin plunged nearly 5% to near $60,000 following reports of U.S.-Israel strikes on Iran, raising questions about its “digital Gold” status.
- The price rebounded sharply to over $68,000 as news spread that Iran’s supreme leader was killed, potentially lowering escalation risks.
- Traders are closely monitoring Iran’s response, with fears that disruption to shipping in the Strait of Hormuz could trigger broader market turmoil.
- The incident highlights debates over crypto’s role in geopolitical finance and its correlation with traditional safe havens like gold.
Bitcoin experienced extreme volatility over the weekend, plummeting toward $60,000 after news broke of a preemptive strike by Israel against Iran, with U.S. participation according to AP sources, before rallying strongly on Sunday. The initial crash of almost 5% happened in minutes, with one market watcher posting to X that a “flight to safety” would accelerate.
However, the cryptocurrency staged a dramatic recovery, topping $68,000 on March 1. This rally coincided with reports that Iran’s Supreme Leader Ali Khamenei had been killed, which traders interpreted as reducing the likelihood of a major retaliation. Consequently, the price action partly restored faith in bitcoin trading alongside traditional havens, as gold and oil also spiked ahead of Monday’s market open.
Meanwhile, U.S. President Donald Trump issued stark warnings to Iran, posting on Truth Social that further retaliation would be met with unprecedented force. He later told Axios he could “end it in two or three days.” Analysts now focus on the critical risk of disruption to shipping in the Strait of Hormuz, with Roundhill Financial’s Dave Mazza telling Bloomberg, “If it doesn’t, all bets are off.”
Furthermore, the event sparked discussion about crypto’s role in shadow finance for sanctioned states. Benoit Bosc of x2B noted cryptocurrencies have given nations like Iran a “meaningful lifeline” against sanctions, though stablecoin issuer Tether has frozen related accounts. Ultimately, the episode tested bitcoin’s reputation as a safe-haven asset, with its sharp initial drop contrasting with gold’s rally.
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