Bitcoin Price Drops Below $70K as Iran Conflict Escalates – Is It a Safe Haven?

President Donald Trump issued a 48-hour ultimatum to Iran on Saturday, threatening to strike Iranian power plants if Tehran does not fully reopen the Strait of Hormuz to international shipping. The threat, delivered via a post on Truth Social, came as Iran launched what has been described as its most destructive attack yet on Israel, and as the key oil passage remains effectively closed.

“If Iran doesn’t FULLY OPEN, WITHOUT THREAT, the Strait of Hormuz, within 48 HOURS from this exact point in time, the United States of America will hit and obliterate their various POWER PLANTS, STARTING WITH THE BIGGEST ONE FIRST!” Trump wrote. The deadline, according to the time of his post, is 23:44 GMT on Monday.

In response, Iran’s army has stated it will target energy and desalination infrastructure “belonging to the US and the regime in the region,” according to the Fars news agency. Iranian Foreign Minister Abbas Araghchi has said that restrictions imposed by Tehran only apply to vessels from countries involved in attacks against Iran, and that other ships will be allowed passage if they remain neutral.

The ultimatum represents a significant escalation in rhetoric, coming just a day after Trump indicated he was considering “winding down” military operations following three weeks of conflict. Thousands of US Marines are currently en route to the Middle East, according to reports. The closure of the Strait of Hormuz, a vital trade chokepoint through which approximately 20 percent of the world’s oil flows, has already caused oil prices to surge, exceeding $100 a barrel multiple times in recent weeks, with diesel prices surpassing $5 a gallon.

Trump’s warning as well follows criticism of NATO allies, whom he accused of lacking the “courage” to assist in securing the waterway. He also claimed the strait is of little strategic importance to the U.S., suggesting it would eventually “open itself.”

The escalating tensions have reverberated through cryptocurrency markets, with the price of Bitcoin falling below $70,000. Experts suggest a prolonged conflict in the Middle East would likely be detrimental to Bitcoin’s value. Georgii Verbitskii, founder of the crypto trading platform TYMIO, stated that any disruption to global trade routes increases uncertainty across financial markets, putting pressure on equities and, Bitcoin, which remains highly correlated with risk assets.

Analysts also point to the Federal Reserve’s recent decision not to cut interest rates as a contributing factor to the market uncertainty. David Lawant, head of research at Anchorage Digital, has noted that crypto markets are not immune to macroeconomic headwinds. Han Tan, chief market analyst at Bybit Learn, cautioned against prematurely labeling Bitcoin a “safe haven” asset, stating it has yet to prove its merits in that regard. Verbitskii concurred, adding that Bitcoin is currently reacting to global liquidity conditions and movements in traditional financial markets rather than acting as an independent geopolitical hedge.

As of Sunday, missiles continued to fall across the Middle East. Bitcoin was trading at $68,700 at the time of writing.