Escalating tensions between Israel and Iran have triggered a seismic shift in asset markets, with traditional safe-haven gold rallying toward record highs while cryptocurrencies experienced severe losses. The conflict prompted over $1 billion in crypto liquidations, including a nearly 3% Bitcoin drop and a roughly 10% Ethereum plunge as risk aversion intensified.
Gold prices surged toward $3,422 per ounce, cementing its status as a preferred shelter during global instability. This divergence starkly contrasts with Bitcoin’s performance, which analysts attribute to its unstable correlation with equities — historically fluctuating between -0.2 and 0.4 — undermining its reliability as a macroeconomic hedge.
The crisis involved multiple global players, with Iran issuing threats of a ‘lethal’ response to Israeli strikes amid reported support networks involving China, Russia, and North Korea. As volatility rippled through markets, institutional and retail investors alike began reallocating from cryptocurrencies toward gold, prioritizing disciplined risk management strategies during the geopolitical standoff.
This episode reignited debates about cryptocurrency’s role in portfolio hedging, with gold reaffirming its haven appeal while Bitcoin’s value proposition faced renewed scrutiny amid flight-to-safety movements.