US-Iran Conflict Triggers Crypto Market Sell-Off, Oil Prices Surge

Following a U.S.-Israel strike on Iran on February 28, 2026, global markets experienced significant volatility. The conflict, initiated with attacks on Iranian facilities, prompted retaliatory missile and drone launches, extending to neighboring Gulf states like Bahrain, Kuwait, and the UAE. Crypto markets reacted swiftly, shedding over $100 billion in market capitalization within hours, with Bitcoin dropping as low as $62,000 and Ethereum falling over 5%. Over $500 million in crypto liquidations occurred. While historical data suggests markets often recover after initial wartime sell-offs, concerns over potential disruption to the Strait of Hormuz – handling 20% of global oil supply – are fueling fears of sustained inflation and a potential recession. Oil prices surged, reaching $72 per barrel, exacerbating these concerns. Analysts suggest the conflict's impact on crypto is less about its 'digital gold' narrative and more about broader macroeconomic implications, including inflation, interest rates, and global liquidity. Some traders, however, had anticipated the strikes and profited from pre-event wagers.