03/01 update below. This post was originally published on February 28
The bitcoin price has dropped sharply, plunging toward $60,000 per bitcoin and losing almost 5% in a matter of minutes.
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Bitcoin’s plunge comes as Israel strikes Iran, with the U.S. participating in the attack, according to AP sources.
Israel launched what it called a “preemptive strike” against Iran on Saturday morning local time, according to the country’s defence minister Israel Katz, it was reported by Reuters.
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U.S. president Donald Trump has warned Iran not to retaliate after the U.S. and Israel strike sent shock waves through markets, hitting the bitcoin price.
AFP via Getty Images
“Bitcoin just dropped off a cliff,” one bitcoin and crypto market watcher posted to X, adding that “Monday will be a bloodbath in the market [as the] flight to safety will accelerate.”
The bitcoin price has failed to trade in line with gold in recent months, damaging its reputation as a burgeoning safe haven asset that’s sometimes referred to as digital gold.
03/01 update: Bitcoin has bounced back following its sudden sell off after news first broke that the U.S. and Israel had launched strikes on Iran, topping $68,000 per bitcoin after dropping to just above $63,000.
The bitcoin price rallied as word spread that Iran’s supreme leader Ali Khamenei had been killed in the attack, with traders betting that meant a lower chance of Iran retaliating.
“I can go long and take over the whole thing, or end it in two or three days and tell the Iranians: ‘See you again in a few years if you start rebuilding [your nuclear and missile programs],” U.S. president Donald Trump told Axios. “In any case, it will take them several years to recover from this attack.”
Earlier, Trump warned Iran not to further retaliate, posting to his Truth Social that, “they better not do that, however, because if they do, we will hit them with a force that has never been seen before.”
The price of gold and oil both spiked ahead of Monday’s market open on the crypto exchange Hyperliquid, where perpetual swap futures and tokenized asset give traders exposure to assets outside of normal operating hours.
A near-2% gold price rally is likely to push the traditional safe haven back toward its all-time highs when markets reopen after the weekend, with bitcoin’s weekend rally helping to somewhat restore some faith in its ability to trade alongside gold.
Traders are closely watching for how Iran responds to the attack, with fears persistent that Iran could escalate the situation into a broader, regional conflict that causes market chaos and a drawn out U.S. battle.
“This is about Hormuz risk, not retaliation. If shipping stays open, stocks can work through it,” Roundhill Financial’s Dave Mazza told Bloomberg. “If it doesn’t, all bets are off.”
Meanwhile, some speculated that the fall of the Khamenei’s regime could send shockwaves through the world of shadow finance that’s embraced bitcoin, crypto and stablecoins in recent years.
“[It’s] unclear how much of the bitcoin and broader crypto pressure is linked to a shadow financing war between the west and rogue states,” Benoit Bosc, a former portfolio manager at Millennium who now runs the crypto advisory business x2B, said in an emailed note.
“Some geopolitical analysts noted when the U.S. first intervened in Venezuela that cryptocurrencies gave North Korea, Russia, Venezuela and Iran a meaningful lifeline against OFAC sanctions, though Tether has since stepped in and frozen USDT accounts linked to sanctioned entities, so there are two sides to this coin. Before crypto, some of those countries appeared genuinely close to collapse.”
Ahead of the attack, analysts speculated what war with Iran could mean for bitcoin, gold and stocks.
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The bitcoin price has crashed over the last few months, with the Iran war piling fresh pressure on bitcoin.
Forbes Digital Assets
“From a macroeconomic perspective, any direct confrontation could disrupt energy markets and push oil prices higher, exerting upward pressure on inflation and limiting central banks’ room for maneuver. In such an environment, investors tend to reduce exposure to volatile assets, increase liquidity holdings, or shift toward traditional safe havens,” Rania Gule, senior market analyst at XS.com, said in emailed comments.
“Some estimates suggest that gold could rise by around 15% within two weeks in the event of a direct conflict, targeting a range between $5,500 and $5,800 per ounce. Whether these projections materialize or not, the message is clear: in moments of existential risk, investors return to assets that have historically preserved value. In this context, I believe bitcoin—despite the ‘digital gold’ narrative—has not yet proven itself as a safe haven during sharp geopolitical shocks. Its recent behavior indicates that it is still priced as a high-beta risk asset sensitive to global liquidity flows.”