Bitcoin news covers a broad range of topics, though at the heart of most stories is what kind of impact will be had on the price of the popular cryptocurrency. One factor that could be potentially impacting its price is the rising conflict between Israel and Iran.
Tensions continue to rise and many feel that it is only a matter of time before the United States is entered into a war that many of its people do not want. How this series of events will play out, no one knows. What kind of impact it has on the crypto market going forward also remains to be seen.
Bitcoin Prices Dip but Largely Hold
Those with a keen interest in cryptocurrency markets tend to watch to see what Bitcoin will do when major events take place. In this instance, Bitcoin has largely remained stable. It did drop below $103K but hasn’t suffered major dips as it has in the past.
There are similar trends when major conflicts rear their ugly heads. Things like institutional involvement and adoption play a key role, which is likely why things rebound. Some analysts, like head of research at Bitwise’s ETP platform ETC Group Andre Dragosch, believe that Bitcoin’s price can suffer when conflicts break out.
Overall, volatility in BTC has been on the downturn, but it is still seen by some to be a very risky asset. When conflicts break out – particularly, ones that threaten to escalate into war – it is more likely to be sold at a quicker pace.
Mithil Thakore, CEO and co-founder of Bitcoin layer-2 liquidity protocol Velar, said, “Over the long term, geopolitical conflicts raise the prospects of higher inflation rates globally due to factors like increased fiscal spending, looser monetary policy, supply-chain disruptions and commodity price spices, which should all benefit Bitcoin.”
Israel-Iran War Overview
Prior to the beginning of this latest conflict, other factors threatened the area. Not including the Russian invasion of Ukraine, there is also the Isreal-Gaza war that has been brewing for the better part of the past two years.
Hamas forces have been killing Israeli targets, igniting a war and humanitarian crisis that remains a hot-button topic to this day. Arms manufacturers saw their prices spike while Israeli markets saw major losses. Bitcoin was largely unaffected, however.
Just a few days after the attack, however, reports began to surface that Hamas had raised money in crypto. This led to renewed calls for regulatory oversight within the space. A Gaza-based crypto operator was then sanctioned by the US Treasury as it had alleged ties to Hamas.
The event that perhaps started this recent war came on April 1, 2024. Israel struck an embassy complex run by Iran in Syria, killing a number of top senior officials. Iran then seized MSC Series, an Israeli ship, and launched counterattacks on Israel on April 13. What is most interesting there is that Bitcoin dropped 8% before bouncing back.
The two countries have been long-time rivals. Things were escalated days ago when, on June 13, 2025, Israel attacked dozens of strategic targets in Iran. It was the largest attack on Iran going back to the war Iran-Iraq war of the 1980s. Since then, the two have volleyed strategic missile strikes against one another.
Isreal has been calling for intervention by the United States. Just as interesting is that the markets have largely shrugged off concerns created by this escalation. Bitcoin remains relatively strong, though it did experience a brief drop when bombings began.
Major Bitcoin analysts, including Michael Saylor, are unfazed by this turn of events. Saylor is perhaps the most notorious backer of an acquisition-based strategy. On June 16, his Strategy firm acquired another 10,001 BTC for $1 billion. This latest purchase comes after STRD, the company’s Bitcoin-backed preferred stock, started trading on the Nasdaq on June 11.
How Do Major Conflicts Impact Bitcoin?
To those not familiar with the cryptocurrency marketplace, it may seem confusing that a major global conflict could have an impact on digital currencies. As it stands, there are several major reasons why something like the Isreal-Iran conflict can have an impact.
Safe Haven Appeal
When there are major economic conflicts, like this one or the trade war between the US and China, investors see cryptocurrencies as a “safe haven” asset that is akin to gold. Should national currency confidence drop, investors could shift to crypto in order to preserve wealth, but that behavior is far from consistent.
Increased Volatility
The single biggest factor related to wars – both military and trade – is that it creates uncertainty in the global marketplace. Assets of all kinds – not just crypto, but bonds and stocks – become far more volatile. Additionally, because it is an asset that has high liquidity, crypto can see downturns when there are major global tensions. The high movement volume in times of crisis also doesn’t do much to help the volatility concerns crypto faces.
Regulatory Responses
The ongoing regulatory landscape is something that bears watching. During conflicts and trade wars, governments may be more apt to tighten regulations on crypto. This has to do with concerns that investors are using crypto to bypass sanctions or capital restrictions.
Capital Flight and Depreciation
It is possible that a country’s currency could weaken due to sanctions, trade tensions, or tariffs. When that happens, citizens may respond by buying crypto to protect against capital controls or inflation. A great example of this is when the Chinese yuan weakened, Bitcoin saw an uptick in activity from Chinese investors.
“Proximity” to Conflict
Some of what drives the market’s reaction to conflict has to do with its exposure or correlation when it comes to traditional markets. For instance, some economists have made note of the relative geographic proximity of conflict and how financial markets in those countries closet to the conflict zone then to see greater losses and volatility.
Adoption of cryptocurrency tends to be highest in nations that are developing. At the forefront of the trend are countries like Indonesia, India, and Nigeria. That aid, Western institutions and world governments are the ones with growing ownership of Bitcoin. Firms like BlackRock are now among the biggest holders of Bitcoin in the world.
Changing Reaction to War?
As institutional adoption increases, Bitcoin’s price may become more heavily influenced by armed conflicts and the negative forces that they create on markets. In previous conflicts, Bitcoin rebounded but those were before the recent trend of widespread adoption.
Because it is now seen as more of a risk-on asset, BTC tends to correlate more to traditional financial markets than it has in the past. Because of that, speculators see BTC as being more susceptible to traditional market trends when conflicts like these arise.
We are entering a very tense period of time in the conflict between Israel and Iran. What this means for the United States, both financially and militarily, remains to be seen. So far, Bitcoin has held mostly strong but future trends will bear watching.
