‘It’s negative for Bitcoin’ – price slides below $70,000 on Iran long war fears

US President Donald Trump’s threat to attack Iranian power plants if Tehran refuses to reopen the Strait of Hormuz has sent the Bitcoin price back below the $70,000 mark.

And experts say the deepening conflict in the Middle East could take a heavy toll on Bitcoin prices, with the spectre of an incoming global recession looming over crypto markets.

“A prolonged conflict in the Middle East would generally be negative for Bitcoin,” Georgii Verbitskii, founder of the crypto trading platform TYMIO, told DL News. “Any disruption to global trade routes increases uncertainty across financial markets.”

This uncertainty will put pressure on equities, Verbitskii said. “Bitcoin is still highly correlated with risk assets, particularly US stock indices. When those markets come under pressure, Bitcoin usually follows.”

The warning comes as experts spoke of an incoming “double-whammy” for risk assets in the wake of the Federal Reserve’s decision not to cut interest rates at its March meeting.

David Lawant, Anchorage Digital’s head of research, told DL News earlier this week that crypto “isn’t immune to macro[economic] headwinds.”

‘No safe haven’

Trump’s warning came hours after suggestions he may “wind down” the conflict.

“Within 48 hours from this exact point in time, the United States of America will hit and obliterate [Iran’s] various power plants, starting with the biggest one first,” he wrote on Truth Social on Saturday.

Tehran has countered by saying the strait remains open to maritime transport, with the “exception of Iran’s enemies.”

Missiles continued to fall across the Middle East on Saturday night and Sunday morning, with Bitcoin prices tumbling by around 3% in the past 24 hours.

“The ongoing Middle East conflict remains the primary lens for traders, investors, and even policymakers worldwide,” Han Tan, chief market analyst at crypto exchange Bybit’s education arm Bybit Learn, told DL News.

Tan said major central banks and others have expressed concern about the “uncertainty surrounding the war’s duration and intensity.”

Rising oil prices could spark inflationary forces in global economies, Tan said.

And Bitcoin investors who expect the world’s most popular cryptocurrency to act as a gold-like hedge against inflation may see their hopes dashed during the conflict, the analyst warned.

“The prudent stance is to withhold from prematurely according the safe haven title to Bitcoin just yet,” Tan said. “Bitcoin is yet to prove its merits on that front.”

Verbitskii concurred.

“Bitcoin is not yet behaving as an independent geopolitical hedge,” Verbitskii said. “It is still largely reacting to global liquidity conditions and movements in traditional financial markets.”

At the time of writing, Bitcoin was trading at $68,700.

Tim Alper is a News Correspondent at DL News. Got a tip? Email him at [e-mail].