Cryptocurrency markets have shed around $80 billion in value over the past 24 hours, with losses accelerating after the US reportedly carried out a new wave of military strikes on Iran.
The US military carried out new strikes late on Wednesday targeting an Iranian military site and shooting down four Iranian attack drones, which a US official told Reuters posed a threat around the Strait of Hormuz.
“These actions were measured, purely defensive, and intended to maintain the ceasefire,” the official said. Iran’s Islamic Revolutionary Guard Corps reportedly released a statement saying that it has retaliated by attacking a US airbase in Kuwait.
The strikes came during negotiations to end the war that began on Feb. 28 with US and Israeli attacks. US President Donald Trump said at a White House cabinet meeting on Wednesday that he was “not satisfied” with a deal with Iran and alluded to further military action.
The US strikes sent crypto markets tumbling to their lowest level since mid-April, after the market had climbed earlier this week after Trump hinted that a peace deal would soon be finalized.
Bitcoin has lost 3.5% on the day, falling to $72,646 on Coinbase, its lowest level since April 13.
LVRG Research director Nick Ruck told Cointelegraph on Thursday that markets sold off as investors priced in heightened geopolitical risk, potential oil supply disruptions, and a flight to safety.
“Bitcoin and Ethereum, despite their long-term narrative as hedges, continue to behave more like high-beta risk assets during periods of uncertainty,” he said.
Traders are now monitoring escalation risks in the Middle East, and any effects on inflation and Fed policy as crypto liquidity quickly thins, and leveraged positions get flushed out.
Ether (ETH) also fell on news of the strikes, collapsing below the psychological $2,000 level, slumping more than 4% to $1,976 at the time of writing. The asset is at its lowest level since late March.
Crude oil prices also reacted with a 3.5% increase as WTI topped $92 while Brent climbed to $98 per barrel.
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