Bitcoin nose dive as political tensions escalate in the Middle East

Bitcoin (BTC) price plummeted over 8.4% on April 13 after Iran launched an attack on Israel, escalating  geopolitical conflicts in the Middle East. 

The cryptocurrency price dropped from around $67,000 to $61,625, wiping out over $130 million in market capitalization within minutes following the attack.

The sell-off is also affecting other cryptocurrencies. At the time of writing, Ether (ETH) was down 9.81% to $2,927, while Solana (SOL) sank 15.96% to $129. According to CoinMarketCap data, the global crypto market capitalization declined 8.19% to $2.23 trillion.

According to Bloomberg, Iran launched drones toward Israel on Saturday. The move is a retaliation for an attack conducted by Israel days before. Israel attacked a diplomatic compound in Damascus, Syria, killing seven Iranians, including two generals.

Aside from the airstrikes, Iranian authorities have reportedly seized a cargo ship owned by a billionaire Israeli.

United States president Joe Biden warned on April 12 that Iran would launch attacks “sooner than later,” highlighting the United States would help defend Israel:

“We are devoted to the defense of Israel. We will support Israel, we will help defend Israel, and Iran will not succeed.”

The conflict between Iran and Israel significantly escalates tensions in the region, something the U.S. has been reportedly trying to prevent since October’s Israel-Hamas conflict.

U.S. officials have been urging Israel not to escalate tensions in their responses to Iran, a government source told CNN. The officials also expressed frustration with the lack of prior information Israel provided regarding its airstrike in Damascus. Israel only informed a U.S. official when its planes were already en route to Syria, sources said.

“We were not aware that Israel was going to carry out this airstrike in advance,” the official stated. “Minutes before it happened and when Israeli planes were already in the air, Israel reached out to a U.S. official to say they were in the process of conducting a strike in Syria. It did not include any details on who they were targeting or where it would be conducted, and the strike was already underway before word could be passed through the U.S. government.”