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Cryptocurrencies experienced a significant decline on Friday, with bitcoin plummeting below the $60,000 mark amid reports of heightened geopolitical tensions.
In the Asia session, bitcoin saw a sharp drop of over 5.5%, reaching $59,961, while Ether also fell below the $3,000 threshold to $2,895.
Geopolitical Developments:
The market downturn followed reports of an Israeli missile strike on Iran, escalating tensions between the two nations.
Israel’s attack came in response to Iran’s earlier drone strike on Israel, according to sources. While Iranian media reported explosions, Israeli authorities remained silent, fueling uncertainty and market volatility.
Flight to Safety:
As news of the attack emerged, investors sought refuge in safe-haven assets such as oil, gold, and bonds, causing initial rallies in these markets.
The flight to safety sentiment underscored concerns about the potential escalation of geopolitical conflicts and its impact on global stability.
Cryptocurrencies Market Response:
Moh Siong Sim, currency strategist at Bank of Singapore, noted that markets were in a “flight to safety” mode, awaiting further clarity on the situation and potential retaliatory measures.
Despite a partial recovery, bitcoin remained down 2% on the day, hovering around $62,300, while Ether regained some ground but remained above $3,000.
Impact on Bitcoin Halving:
The cryptocurrency market turmoil coincided with Bitcoin‘s scheduled ‘halving,’ a significant event that reduces the rate at which new bitcoins are created.
The dip in bitcoin prices just hours before the halving underscored the market’s sensitivity to geopolitical developments and its potential impact on digital assets.
