Bitcoin and Ethereum experienced only a slight increase over the weekend as investors remained cautious amid escalating tensions in the Middle East. The cryptocurrency market appeared to be in a holding pattern as traders awaited further developments following a stern ultimatum issued by U.S. President Donald Trump regarding Iran.
On Saturday afternoon in New York, Bitcoin was trading at approximately $67,404, reflecting nearly a 1% rise over a 24-hour period, according to CoinGecko. Ethereum showed similar movement, also up about 1%, with a trading price of $2,073.
Trump’s warning to Iran was pronounced on his social media platform, Truth Social, stating, “Time is running out — 48 hours before all Hell will reign down on them.” His message emphasized the urgency for Iran to open the strategically critical Strait of Hormuz. Failure to comply, he suggested, would result in intensified U.S. military actions. This backdrop of geopolitical tension has left traders on edge, particularly after a U.S. fighter jet was downed the previous Friday, raising concerns over an escalation that could negatively affect cryptocurrency valuations.
Despite the looming conflict, Bitcoin has managed to rise slightly amid the tensions, reportedly gaining 6% since the initiation of strikes by Israel and the U.S. against Iran on February 28. However, analysts are cautious. They warn that sustained military actions could lead to rising oil prices and economic downturns, which historically exert downward pressure on crypto markets.
Sebastián Serrano, CEO of the Argentinian crypto exchange Ripio, underscored the potential economic implications of continued conflict, stating that sustained inflationary pressures might prompt a more hawkish stance from the Federal Reserve, thereby limiting any significant upside in the crypto markets. He suggested that any signs of de-escalation could reverse this trend and provide a boost.
In a post on LinkedIn, David Duong, Coinbase’s Global Head of Investment Research, echoed these sentiments, stating that a broader U.S. military escalation could heighten the likelihood of a crude oil supply shock and lead to tighter financial conditions, further increasing the chances of a global recession.
Overall, the week has been rather uneventful for Bitcoin, which has traded relatively flat over the past seven days, despite the release of an unexpectedly positive jobs report that noted a decline in the unemployment rate. Interestingly, this good news did not impact Bitcoin’s trading patterns.
In terms of investment activity, U.S. investors injected only $22 million into spot Bitcoin ETFs this week. Meanwhile, Ethereum funds have faced more significant challenges, experiencing net outflows as they continue to lag behind Bitcoin in performance this year, according to data compiled by Farside Investors.
