Geopolitics affecting cryptocurrencies
The latest escalation of the geopolitical situation around Iran has led to a drop in the bitcoin price. US President Donald Trump has issued a 48-hour ultimatum to Iran regarding its power plants, which has triggered a wave of sell-offs in the cryptocurrency market.
According to CoinDesk, over the past day, bitcoin has fallen in price by 2.2%, reaching a level below $69,200. At the same time, $299 million in positions were liquidated, with 85% of them being long positions.
This market reaction is quite understandable. Geopolitical instability related to Iran traditionally puts pressure on the bitcoin and other cryptocurrency prices. Investors prefer to shift to safer assets, such as gold or the US dollar, during periods of increased geopolitical risks.
However, this is not the first time that cryptocurrencies have demonstrated their high volatility against the backdrop of foreign policy events. Investors should take this factor into account when forming their portfolios and managing their risks.