Geopolitical heat in the Middle East is melting crypto prices.

Bitcoin has fallen 3% to about $105,000 since the conflict between Israel and Iran started on June 12, according to CoinGecko. Ethereum plunged 8% to around $2,500 and nearly $200 billion was erased from the crypto market in the past six days.

Markets are reeling after US President Donald Trump hinted that the US could soon intervene in the conflict between Israel and Iran. Just last week, Israel launched a series of airstrikes in retaliation for attacks by Iran-backed militants.

“We know exactly where the so-called ‘Supreme Leader’ is hiding,” Trump posted on social media, referring to Iranian head of state Ali Khamenei. “Our patience is wearing thin.”

That political brinkmanship has sent tremors through capital markets. US stocks slipped, oil prices jumped, and gold plunged.

Risk assets like stocks and crypto tend to fall — at least initially — when war breaks out because investors flee uncertainty. Armed conflict rattles global supply chains, can destabilise economies, and trigger inflation, especially if oil prices spike. Iran produces about 3.3 million barrels of oil daily, which is about 4% of global production.

And in crypto, the impact of Trump’s latest warning was immediate and severe. Coinbase stock fell 4%, Strategy about 3%, and Circle — which went public last week, offering up a triple-digit jackpot for investors — plunged nearly 3%. They have since slightly recovered.

Odds of a US military strike on Iran before August soared to 70% on Polymarket.

To be sure, the longer term implications of a global conflict on Bitcoin’s price remain unclear. In fact, the top crypto tends to rebound after geopolitical shocks.

In 2022, following Russia’s invasion of Ukraine, both Bitcoin and gold underperformed. According to Bitcoin analyst James Check, Bitcoin plunged 40% while gold lost 5% in the first year following Russia’s attack.

“I should note that the US Federal Reserve was aggressively raising interest rates, and most markets were in a bear market,” Check wrote in his Monday newsletter, Checkonchain.

Following Hamas’s October 7 attacks against Israel in 2023, gold and Bitcoin spiked. The precious metal appreciated 38% while Bitcoin gained 70%.

“The Bitcoin ETFs launched a few months after the conflict, and gold was experiencing a major bid from global central banks,” said Check.

For Check, there might be more at play than rising tensions in the Middle East.

Still, eyes are on the skies in Tehran and Tel Aviv.

Pedro Solimanois a markets correspondent based in Buenos Aires. Got a tip? Email him atpsolimano@dlnews.com.