 ▲ Bitcoin (BTC), Silver/AI-generated image |
A joint military operation by the United States and Israel against Iran triggered sharp volatility in Bitcoin, which acted as a real-time pressure valve reflecting geopolitical tensions.
According to cryptocurrency media outlet Decrypt on March 2 (local time), the virtual asset market experienced a shock over the weekend as military clashes in the Middle East sent Bitcoin (BTC) briefly plunging to the $63,000 level, wiping out approximately $128 billion in market capitalization. However, immediately after reports emerged that Iran’s Supreme Leader Ayatollah Ali Khamenei had died, the market staged a swift rebound, recovering to the $68,000 range in a dramatic turnaround. The episode underscored the unique mechanism of the 24/7 crypto market, which absorbs and processes geopolitical risks ahead of traditional financial markets that remain closed over the weekend.
U.S. President Donald Trump reaffirmed his hardline foreign policy stance related to the operation, declaring that the United States would avenge the deaths of its citizens and would not halt attacks until military objectives were achieved. Trump claimed that Iran’s military command structure had effectively been destroyed and urged the Iranian military to surrender unconditionally. His remarks fueled a surge in international oil prices and renewed demand for safe-haven assets, reigniting debate over whether Bitcoin functions as a safe-haven asset like gold or remains categorized as a risk asset vulnerable to sharp declines.
Bitcoin had already fallen about 50% from its all-time high of $126,000 recorded in August 2025 when it faced this latest Middle East shock. While gold maintained its upward trajectory, Bitcoin initially reacted sensitively to the shock and declined, but as uncertainty surrounding the situation eased, bargain buying quickly emerged, demonstrating its resilience. Market analysts noted that crypto assets moved ahead of stock futures markets, serving as an early barometer of global risk sentiment.
Major altcoins, including Ethereum (ETH), joined Bitcoin’s rebound, recovering roughly $32 billion in market capitalization within a single day after weekend losses. However, with tensions in the Strait of Hormuz persisting and the possibility of Iranian retaliation not fully ruled out, investors continue to maintain a cautious stance. In particular, many leveraged traders in the derivatives market were liquidated during the sharp downturn, leading some analysts to say that a forced market cleansing had taken place.
The crypto market is expected to maintain heightened volatility for the time being, depending on military developments in the Middle East and the direction of U.S. foreign policy. Whether Bitcoin can reclaim the $70,000 level and break its long-term downtrend may hinge on how it weathers this geopolitical crisis. Investors are closely monitoring correlations with traditional safe-haven assets while strengthening portfolio risk management.
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