What began as an Israeli strike on Iran hours earlier has escalated into the largest military conflict in the Middle East in decades, posing a risk to financial markets, including cryptocurrencies.
According to reports on Bloomberg, CNN and Reuters, Iran has launched waves of missiles and drones targeting not only Israel but also US bases and interests across the Gulf. Bahrain confirmed that a US military base had been attacked. Qatar and the United Arab Emirates reported intercepting missiles over their territory. Explosions were heard in Dubai. Bahrain has completely closed its airspace.
Iran’s semi-official Tasnim news agency said all US bases and interests in the region would be targeted.
President Trump said the United States had launched “major combat operations in Iran” aimed at eliminating the country’s missile inventory, navy and nuclear infrastructure. “The lives of courageous American heroes could be lost and we could have casualties,” he said. “This happens a lot in times of war.”
Bitcoin, which had already fallen below $64,000 during the first Israeli strikes, held above $63,000 when the wave of retaliation hit. Relative stability is partly mechanical. Liquidity over the weekend is low and many leveraged positions that could amplify a selloff have already been eliminated during the week’s $70,000 drop.
But the real test will come when traditional markets reopen on Monday. Bitcoin tends to absorb the first wave of geopolitical selling, as it is the only significant liquid asset trading on a Saturday afternoon.
Stocks, oil and bonds do not have this option until the futures open on Sunday evening or Monday. If the gap between these markets narrows significantly, bitcoin could face a second wave of risk-free selling as portfolio managers simultaneously de-risk across all asset classes.
This could potentially open the door to $60,000 or less.
Previous escalations in the Middle East have followed a pattern in which Bitcoin falls during the initial shock and recovers once traditional markets absorb the news and the situation appears contained. This is how Iran’s retaliatory strikes against Israel played out in April 2025. The same was true for earlier tensions in 2020.
This time, the containment thesis is much more difficult to argue. Missiles landing in Dubai, Kuwait and Bahrain do not constitute a bilateral exchange. This is a regional war that affects some of the most economically sensitive territories on the planet.
Downside risk is simple. If the conflict widens, oil prices could rise on both sides of the Atlantic, which could lead to global risk aversion and greater losses for Bitcoin. Although cryptocurrency is often thought of as digital gold, it has historically traded more as a risk asset than a safe haven.
The $60,000 floor that held during the February 5 crash becomes the next line of defense, and it will be tested under conditions far harsher than leverage.
