The U.S.-Iran conflict has a mixed and highly volatile impact on the crypto market,
often causing short-term price fluctuations and acting more like a risk asset than a traditional safe haven. During escalating tensions, prices tend to initially fall due to general risk aversion, but they can quickly rebound as investors or state actors use cryptocurrencies like Bitcoin and Tether (USDT) to hedge against local currency devaluation and bypass economic sanctions.
Recent Trends and Key Insights
Initial Price Drops Followed by Rebounds: News of direct military action, such as U.S. airstrikes on Iranian facilities, has historically led to immediate market sell-offs and sharp price declines for Bitcoin and other major cryptocurrencies like Ethereum and Solana. However, these dips are often followed by quick recoveries as market participants expect the conflict to be contained or as the assets' unique properties become more appealing.
A Tool for Evasion and Survival: For Iran, both the government and its citizens use cryptocurrencies as a lifeline. The Iranian central bank has stockpiled over $500 million in Tether (USDT) to circumvent international sanctions and support the national currency, the rial, which has lost about 90% of its value since 2018. Iranian citizens also turn to Bitcoin to protect their savings from hyperinflation and capital controls.
