Recent threats from former U.S. President Donald Trump towards Iran have heightened tensions in the Middle East and led to significant crypto market losses.
Trump's Threats Escalate Tensions
Trump's threats against Iranian leadership have reignited crisis sentiments in the Middle East, causing concern across global markets. Key figures, such as Trump and claims regarding potential Israeli actions, contribute to the uncertainty affecting global stability.
Market Loses $60 Billion
As a result of geopolitical instability, the crypto market experienced a sharp decline of $60 billion. Investors began to shift towards safer assets such as the dollar and Treasuries, leading to drops in Bitcoin and altcoin prices.
CITE_W_A: "Bitcoin is still behaving more like a high-risk tech stock than a geopolitical hedge. Investors are moving to the dollar and Treasuries, not digital assets." - Lucas McCarthy, Strategist, Chainform Capital.
Historical Failures of Cryptocurrency as a Safe Haven
Historical events, such as the 2020 U.S.-Iran airstrikes, have shown that cryptocurrencies fail to function as safe havens during crisis periods. Experts expect a continued shift towards traditional safe havens during escalating tensions, anticipating further volatility in crypto markets.
Thus, the recent escalation of tensions in the Middle East once again calls into question the status of cryptocurrencies as a safe asset. Investors are proceeding with caution, which could lead to renewed volatile fluctuations in the market.
