Bitcoin Falls on Israel-Iran Conflict — Market Questions BTC’s Safe-Haven Role

• Bitcoin sank over 5% as Israel-Iran strikes triggered selloffs, shaking its safe-haven narrative.
• Massive long liquidations and gold’s rise underline Bitcoin’s risk asset tag during global crises.

Bitcoin (BTC) dropped over 5% early Friday, tumbling from a recent high of $108,000 to around $103,000. The decline followed overnight Israeli airstrikes in Iran, causing renewed concerns about Bitcoin’s reliability as a safe-haven asset during geopolitical tension. At publication time, the digital token slightly recovered to $104,469.

Oil markets rose in parallel with the Middle East developments. Brent and WTI crude prices surged more than 10% as traders worried about potential supply disruptions if Iran retaliates or targets U.S. positions in Iraq or Syria. Gold moved higher by about 1%, benefiting from traditional investor behavior in times of crisis.

The Israeli Defense Forces labeled the strikes as “Operation Rising Lion.” Dozens of military and nuclear sites in Iran were reportedly hit, including facilities in Natanz. Iran’s state outlets confirmed several high-profile deaths, including Islamic Revolutionary Guard Corps head Hossein Salami and nuclear scientist Fereydoon Abbasi.

Middle East Conflict Pressures Risk Assets

The International Atomic Energy Agency is now monitoring radiation levels and the safety of its staff in the region. Meanwhile, Israel declared a state of emergency, advising civilians to remain near shelters. Prime Minister Netanyahu described the attack as necessary for national survival.

The impact extended beyond cryptocurrencies. Asian equities opened lower, and investors directed funds into traditionally defensive assets. The surge in oil prices sparked fresh concerns about inflationary pressure, which could influence rate decisions in the U.S., Europe, and Asia in the weeks ahead.

Bitcoin followed a pattern seen in earlier geopolitical crises. Rather than holding its ground like gold, it dropped along with stocks. The sharp decline caused over $422.97 million in long positions to be wiped out within 24 hours, according to CoinGlass.

Source: Coinglass

Investors Reevaluate Bitcoin’s Crisis Role

While many argue Bitcoin’s supply cap makes it a useful long-term hedge against monetary debasement, its short-term reactions remain tied to broader market volatility. The latest drop highlighted how institutional investors often cut high-risk exposure quickly when uncertainty spikes.

A trader on X criticized Bitcoin’s performance, saying: “It’s definitely proven itself as a fool’s paradise during times of abundance.” He argued Bitcoin fails as both an inflation hedge and a crisis safe haven, especially when compared to gold.

However, the same does not apply to BTC. Neither has BTC proven itself as a hedge against inflation nor as a safe heaven during times of crises.

If at all, its definitely proven itself as a fool's paradise during times of abundance. In fact, its the opposite of gold.

— yshvak (@yshvak) June 11, 2025

With investors watching for Iran’s response, attention is turning to the potential effects on global energy markets and currency exchange rates. Traders are weighing how sustained conflict could reshape not only regional politics but also broader asset allocation strategies.

Bitcoin’s failure to gain during this crisis has once again raised questions about its place during global emergencies. It remains highly sensitive to liquidity pressures and investor sentiment, despite attempts to paint it as a digital equivalent of gold. As traditional commodities gain on conflict news, Bitcoin’s store-of-value story weakens further.