The cryptocurrency market saw a sharp decline today with investors shaken up after noticing geopolitical unrest in the Middle East earlier Friday.
Flagship cryptocurrencies led the decline. Bitcoin (BTC) dropped 5.8%, Ethereum (ETH) fell 12%, XRP shed 7.75%, and Solana (SOL) declined by 12.37%.
The volatility triggered a wave of liquidations with over $320 million in bullish crypto positions wiped out within one hour, according to reports.
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Bitcoin, Ethereum suffer heavy liquidations
Bitcoin alone saw nearly $437 million in long positions liquidated over the past 24 hours. A single $201 million long bet on Binance being the largest casualty.
Meanwhile, as uncertainty grew, investors turned to traditional safe assets. Gold prices climbed sharply showing how people moved away from risk assets like cryptocurrencies and equities. Shipping and energy stocks also surged in response to fears of supply disruptions. Oil prices went up by 9%, over concerns of potential disruptions through the Strait of Hormuz.
Strait of Hormuz is a key oil transit route controlled in part by Iran.
Middle East Tensions Further Escalate
On Friday, Israel launched a major military operation dubbed Operation Rising Lion targeting Iranian nuclear sites, including the uranium enrichment facility in Natanz.
Several Iranian military and nuclear leaders were reportedly killed.
The offensive significantly escalated Israel-Iran hostilities, which also sent ripples through global markets.
Eventhough the strait is strategically important, U.S. investment bank J.P. Morgan assessed the risk of a full closure by Iran as “low,” noting that such a move would hurt Iran’s own economic interests. “The closure of Hormuz is a low-risk event as Iran would be damaging its own position, both economically and politically,” the bank said.
