Attacks on Iran Trigger $128 Billion Wipeout in Crypto Markets

The crypto markets slid over the weekend after Israel and the United States carried out coordinated military strikes in Iran on Saturday, February 28, rattling global markets and prompting investors to pull back from higher-risk holdings.

Bitcoin fell nearly 4% at one point, touching $63,038 before trimming losses to hover around $64,000. Ethereum, which ranks second in market capitalization, slid 4.5% to $1,836. CoinGecko data indicates that the combined value of the global crypto market shrank by approximately $128 billion in the immediate aftermath of the attacks.

Reports of blasts in Tehran surfaced shortly after the strikes began. In the aftermath, President Donald Trump urged Iranian citizens to consider replacing their leadership once the operation concludes, adding a further political dimension to an already volatile situation.

Market participants had been bracing for heightened tensions, particularly as U.S. troop deployments in the Gulf region increased in recent weeks. However, some investors had expected diplomatic efforts to resume rather than escalate into confrontation.

Wealth Club chief investment strategist Susannah Streeter noted that the rapid turn toward military action caught many off guard. She said that uncertainty surrounding the conflict is likely to steer capital toward perceived safe havens such as gold, which has historically attracted demand during periods of geopolitical stress.

The latest slide in Bitcoin adds to a broader downturn that has weighed on the sector for months. The decline began last October, when roughly $19 billion in leveraged bets were unwound in a wave of liquidations. After surging past $126,000 to set a record high, Bitcoin has since shed about half of its value.

According to Arctic Digital’s Justin d’Anethan, Bitcoin often functions as a 24-hour pressure valve when unexpected developments occur outside traditional market hours. He noted that while prices did fall following the strikes, the reaction was not as extreme as some traders had anticipated.

With much of the speculative borrowing already cleared from the market during previous sell-offs, he anticipated that large macroeconomic shocks might now produce more contained moves. Still, he cautioned that further declines remain possible if tensions intensify.

Activity in crypto derivatives also spiked. CryptoQuant data shows that sell orders tied to Bitcoin jumped by approximately $1.8 billion within a single hour on Saturday morning. Analysts described the surge as evidence that sellers were firmly in control in the short term. They added that recent trading patterns appear driven more by fear and risk reduction than by changes in long-term fundamentals.

Crypto industry players like BitFuFu Inc. (NASDAQ: FUFU) will be closely watching the developments in the Middle East to gauge the additional impact of these geopolitical events.

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