Bitcoin Tanks 2% as Iranian Missile Strikes Send Shockwaves Through Crypto Market

The recent wave of Iranian missile strikes on US military targets across six Gulf States has sent shockwaves through the crypto market, causing Bitcoin to plummet by over 2% and resulting in $350 million in liquidations.

The attacks, which took place between July 12 and 17, targeted US assets in Bahrain, Kuwait, Qatar, Jordan, Oman, and the UAE. Iran's response was broad, with the country re-closing the Strait of Hormuz on July 11 - just one day before the first missile strikes.

The crypto market responded exactly as expected: traders scrambled to de-risk their portfolios in the face of a genuine regional war. Leveraged long positions were wiped out as the price cascaded through support levels, resulting in a familiar pattern of panic selling and forced liquidations.

The impact on Iran's use of cryptocurrency is also significant. US authorities have previously seized or sanctioned Iranian-linked cryptocurrency wallets worth over $344 million, revealing that Iran has been using crypto to circumvent economic sanctions for years. This raises urgent questions for DeFi protocols about whether they can or should block sanctioned addresses.