This Tuesday, the Israel Defense Forces (IDF) reported an attack against them with ballistic missiles from Iran. This attack would be a response from the Persian country after Israel assassinated Hezbollah leader Hasan Nasrallah. In that event, Iranian military representatives died. Crypto market investors await the consequences of this new episode of tensions in the Middle East.
As might be expected, a war in this region could have enormous repercussions on international markets. Consequently, we should not lose sight of the fact that the region is the epicenter of the global oil market. Likewise, the Middle East is the epicenter of global maritime trade.
A large-scale war would cause the closure of the main commercial checkpoints such as the Strait of Hormuz. In general terms, it would represent a strong shock to global markets. The eventual disruption of maritime trade would cause a sharp resurgence in inflation and recession in the US could be an inevitable fact.
The next few hours will be crucial and the role of the United States as a mediator or as a participant In this possible war it would be decisive. In the worst-case scenario for the crypto market, it could suffer a strong decline. The possible black swan that we recently talked about would have already manifested its presence.
Crypto market response to the conflict in the Middle East
The reaction of the markets, minutes after learning of the alleged Iranian attack against Israel, was one of retreat. The Dow Jones experienced a drop of 250 points and continues to decline. At the time of writing, the S&P 500 and Nasdaq are also declining sharply.
In the Cryptocurrency space, investors are also in widespread panic. The price of Bitcoin falls to $61,500 per coin, with a decline of 2.62% in 24 hours. On the other hand, the memecoin sector also drops considerably, with drops approaching double digits among the main currencies. The capitalization of the sector collapsed from $53 billion to the current $44 billion.
For its part, another sector that had been doing well, AI tokens, shows a similar decline. Its capitalization fell from $39.3 billion to the current $35.1 billion, according to CoinMarketCap.
Both the crypto market and the rest of the financial markets are waiting for the next chapter in this conflict. During the last few months, Israel attacks numerous countries (according to them in self-defense) that are allies of Iran. Added to this are attacks within Iran’s own territory. As you can see, it was a matter of time before a major conflict broke out.
Currently, Israeli troops invade Lebanon. In recent months, they have also attacked Syria, Iraq, Iran and Palestine.
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