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Bitcoin and other cryptocurrencies are currently seeing a decline in their values due to increasing geopolitical tensions in the Middle East. This downturn reflects the market's sensitivity to global uncertainties, impacting investor confidence and the demand for these digital assets.
During an unprecedented Iranian drone and missile attack on Israel, the cryptocurrency market experienced significant selling overnight Saturday.
Bitcoin faced an 8% decline late on Saturday evening following confirmation from U.S. officials about the attack. With digital coins being among the only risk assets trading over the weekend, the drop was perceived as an initial response to the escalating tensions in the Middle East.
Bitcoin, which had been trading around $70,000 on Saturday evening, plummeted to below $62,000 as per data from the Bitstamp exchange. However, by Sunday morning, it had rebounded and was trading above $64,000. Other cryptocurrencies like ether also witnessed substantial selling, with declines of up to 10% in some instances.
Bitcoin experienced its most significant sell-off in over a year, as reported by Bloomberg. This downturn came after the cryptocurrency had recently achieved new record highs, driven by inflows into U.S. spot bitcoin ETFs, which have been influencing its price movement.
The events in the Middle East overnight marked the first direct attack on Israel from Iranian territory. Israel revealed that it had detected 300 "threats of various types" and successfully neutralized "99%" of those aimed at Israeli territory.
The onslaught of drones and missiles on Israel was purportedly in retaliation to a suspected Israeli strike that resulted in the deaths of senior Iranian officials in Syria.
In response to the escalating tensions, the Iranian currency plummeted to a historic low of 705,000 rials per USD on the unofficial market by 10:30 a.m. local time on Sunday, according to data from the foreign exchange monitoring site Bonbast.
Meanwhile, the Tel Aviv Stock Exchange's primary index, the TA-35, was down by 0.38% at 10:23 a.m. London time.
CNBC’s Ruxandra Iordache contributed to this article.
Source: CNBC
