Middle East Conflict: Crypto Prices Drop as Iran Launches Drones at Israel
Cryptocurrency prices plummet as Iran’s drone attacks on Israel heighten tensions in the Middle East. Investors brace for market volatility, seeking refuge in safer assets like US Treasury bonds and gold. Wall Street awaits futures trading response to the escalating conflict.
After Iran launched a barrage of drones at Israel on Saturday night, cryptocurrency prices dropped. This was a preemptive measure against market volatility as investors began to factor in the possibility of a wider Middle East conflict.
According to CoinMarketCap, XRP fell 13.5%, ether fell more than 7%, and bitcoin fell 5% from its Friday price. That indicates that risky investments are likely to face pressure.
Wall Street’s response to Iran’s first-ever, full-scale military attack on Israel will become more clear on Sunday night when U.S. futures trading for stocks, bonds, commodities, and currencies commences.
Friday’s trading provided a sneak peek at what’s to come. A two-day attack on Israel was predicted by reports at the time, which caused the benchmark oil price in the United States to rise by up to 3% and surpass $87 per barrel.
As investors sought safety, U.S. Treasury bonds saw a strong rally as well, bringing the 10-year yield down by as much as 10 basis points.
In a similar vein, the US dollar strengthened as investors shied away from riskier emerging-market currencies due to geopolitical uncertainties.
A five-month low for the euro was reached against the US dollar as investors considered the possibility that the European Central Bank will lower interest rates before the US Federal Reserve.
Gold, which is also often seen as a safe-haven asset, saw a sharp increase in price to a record high above $2,400 an ounce, although it eventually reversed those gains late on Friday.
On Friday, investors absorbed bank profits and new inflation data that further dashed optimism for impending Fed rate reduction, and as a result, stocks dropped down, led by risk-on tech firms.
Since October, when militants supported by Iran assaulted Israel, tensions in the Middle East have been on the rise. There have also been rocket launches on Israel by other Iranian-backed groups in Yemen, Syria, Iraq, and Lebanon.
More recently, Tehran held Israel accountable for the deaths of two Iranian generals in an attack in Syria on April 1; Israel has not responded to the accusation.