The crypto markets crashed on Tuesday as U.S. President Donald Trump dramatically escalated tensions with Iran, hinting at potential military strikes — and even the possible assassination of Iran’s Supreme Leader.
Trump took to social media to explain the latest developments with Iran, in his usual blunt and provocative style:
“We know exactly where the so-called ‘Supreme Leader’ is hiding,” Trump posted, referring to Iran’s top official, Ayatollah Ali Khamenei. “He is an easy target, but he is safe there — we are not going to take him out (kill!), at least not for now. But we don’t want missiles shot at civilians or American soldiers. Our patience is wearing thin.”
A series of posts from Trump on X made clear he is in the mood for confrontation. Source: X
Bitcoin, which had so far held up surprisingly well during the Israel / Iran conflict, dove for cover.
As of Wednesday morning, BTC is trading at $104,444, down 3.5% in the last 24 hours. The broader market? Even worse. Ethereum is down 6%, while XRP is down 7%. This is what a geopolitical risk-off looks like in real time.
Bitcoin crashed as Trump rattled his saber, Source: BNC Bitcoin Liquid Index
A Classic Crypto Flight to Nowhere
Crypto’s promise was to be uncorrelated, anti-fragile, and immune to the machinations of nation-states. But reality has a way of dunking on ideals. And right now, crypto is just another risk asset bleeding alongside tech stocks and small caps.
The panic wasn’t isolated to tokens either. Crypto stocks cratered across the board. Coinbase (COIN), MicroStrategy (MSTR), and Circle (CRLC) each dropped 2–3%. Bitcoin miners — the industry’s high-beta canaries — got smoked: Bitdeer (BTDR), Riot (RIOT), CleanSpark (CLSK), HIVE, and Hut 8 (HUT) all fell between 6% and 7%.
Trump, fresh off an early exit from the G7, decided to turn the geopolitical dial up to 11. In addition to the thinly veiled threat toward Khamenei, he went full old-school hawk and demanded Iran’s unconditional surrender, even urging Tehran residents to evacuate the city. The White House confirmed that a National Security Council meeting had been convened.
Polymarket odds of U.S. military action against Iran before July? Now sitting at 67%. Traders are betting on war.
The odds of a U.S. strike against Iran have soared, Source: Polymarket
Market Fear, Oil Risk, and the Inflation Wildcard
What makes this especially dangerous for markets — and by extension, crypto — is oil. Iran’s economy may be crumbling under sanctions, but its oil still matters. And if Israeli or U.S. military action disables Iranian output, expect oil prices to spike… and inflation fears to roar back.
At the heart of this market drama is a deeper story: Bitcoin is still trying to define itself. Is it digital gold? Is it a hedge? Is it tech?
In theory, Bitcoin was created because of global uncertainty. Because of central banks, endless wars, and geopolitical manipulation. But that theory continues to be tested in real-time — and markets aren’t sure how to price the asset in moments like this.
Macro Moves: USD Strength, Gold Weakness
Adding complexity, the U.S. dollar is staging a sneaky comeback after hitting a multi-year low — bad news for BTC, which tends to move inversely to the dollar. Meanwhile, gold is fading despite global unrest, suggesting the market isn’t buying into a worst-case geopolitical scenario.
“We are not on the brink of World War 3,” declared The Kobeissi Letter, pushing back on fears that Israel-Iran tensions could morph into a full-blown global crisis.
Still, oil is up 2%, the 10-year yield is nudging 4.5%, and positioning data suggests asset managers are heavily short on the dollar.
Prior to today’s dump, US spot Bitcoin exchange‑traded funds (ETFs) recorded $412.2 million in net inflows on Monday, extending their streak to six days and pushing total cumulative inflows to $46.04 billion.
The six-day run of inflows began on June 9 and has now absorbed over $1.8 billion in capital, according to data from SoSoValue. The run continued despite the escalating geopolitical tensions between Iran and Israel.
Those inflows are likely to come to an abrupt halt when today’s data comes in.
Source: https://bravenewcoin.com/insights/bitcoin-dumps-as-trump-threatens-iran