Explosions echoed across Tehran early Friday. Israeli forces bombed targets inside Iran’s capital. This military action triggered immediate global financial tremors. Following this, Bitcoin plunged sharply, falling below $104,000. Al-Jazeera confirmed the explosions after Axios first reported Israeli operations. Investors globally scrambled for safety as tensions exploded. Markets reacted violently to the sudden escalation.
Israeli Prime Minister Benjamin Netanyahu stated the operation’s goal clearly. Israel aims to destroy Iran’s ballistic missile capabilities. Netanyahu vowed strikes would continue “for as many days as needed.” Therefore, the threat of prolonged conflict hangs heavily. Iran’s Brigadier General Abolfazl Shekarchi promised retaliation. He warned Israel and the U.S. would pay a “heavy price.”
Investors Turn Risk Averse
Bitcoin bore the brunt of the sudden risk aversion. Its price plummeted over 4% within 24 hours. Consequently, it sank to approximately $103,900. Earlier losses accelerated rapidly after the strike news. It touched lows around $103,347. The crypto market erased $1 billion in value swiftly. Significantly, leveraged positions faced massive liquidations totalling $1.02 billion.
Ethereum suffered an even steeper decline, falling nearly 10%. It dropped to roughly $2,500 as selling intensified. Altcoins like Solana and XRP also recorded heavy losses. This starkly contrasted with traditional safe havens. Bitcoin’s behavior challenged its perceived ‘digital gold’ status. Instead, it traded firmly as a risk asset Friday.
Traditional Markets
Global stock markets braced for impact. U.S. stock index futures dropped about 1.5% pre-market. Similarly, European futures fell by a comparable margin. Investors clearly fled equities for safer ground. Conversely, bond prices climbed higher as yields dipped. The 10-year Treasury yield fell slightly to 4.32%. Gold, the classic haven, jumped 1.19% to $3,428 an ounce.
Oil prices surged dramatically on supply fears. Crude oil soared an astonishing 9.6% to $74.42 per barrel. Meanwhile, currency markets saw the U.S. dollar gain against the Euro and Pound. However, it weakened against the Japanese Yen and Swiss Franc. This currency move further signaled deep risk aversion.
Geopolitical Impacts
Friday’s strikes followed months of escalating Middle East tensions. Israel dubbed its action “Operation Rising Lion.” It targeted Iran’s nuclear program and military sites. This attack responded directly to an International Atomic Energy Agency censure. The IAEA had just condemned Iran for non-cooperation. Furthermore, Iran announced a new uranium enrichment site Thursday.
The conflict cycle intensified significantly over the past year. Israel bombed an Iranian embassy in Damascus last April. Iran retaliated with drone and missile attacks weeks later. Subsequent months saw key militant leaders assassinated. Previously, Iran launched ballistic missiles at Israel last October. That event caused a 3.2% Bitcoin drop then. Today’s action represents a major escalation.
International reaction was swift and cautious. The U.S. knew about the strike but did not participate. Secretary of State Marco Rubio urged Iran to avoid U.S. targets. Major global powers called urgently for restraint. The markets remain on high alert for Iran’s response. The potential for wider regional conflict is notable. Following this, volatility is expected to persist across all asset classes. Investors globally will watch the next developments nervously.
Written By Fazal Ul Vahab C H
