The US military struck between 90 and 140 Iranian military installations over a five-day campaign from July 8 to 13, wounding more than 260 people according to Iran’s health ministry. It’s the highest casualty count in a conflict that has been grinding through cycles of escalation and fragile truces since February.

Bitcoin responded the way Bitcoin tends to respond when missiles start flying: it dropped. The largest cryptocurrency fell more than 2% to roughly $62K, while approximately $350 million in leveraged positions across digital assets were liquidated.

A ceasefire that barely lasted three weeks

On June 17, the US and Iran agreed to a ceasefire, the latest in a series of brief pauses in a conflict that began on February 28. That ceasefire lasted exactly 21 days before collapsing under the weight of renewed hostilities.

President Trump announced the termination of the interim agreement, pointing to what he described as renewed Iranian aggression toward commercial shipping in the Strait of Hormuz. That waterway is responsible for roughly one-fifth of global oil transit.

Iran retaliated with its own missile and drone strikes against US-linked positions in the Gulf region. Previous pauses in April and June followed the same trajectory.

Crypto markets are treating this as a risk-off event

Back in June 2025, similar strikes on Iranian sites caused Bitcoin to drop nearly 4% from around $107K. Ether has historically experienced even sharper declines during these episodes. The current sell-off, while painful for leveraged traders, is actually relatively contained compared to earlier rounds.

The $350 million in liquidated positions tells a more specific story. Leveraged traders, many of whom had built positions during the relative calm of the ceasefire period, got caught flat-footed by the rapid escalation. Liquidation cascades in crypto are self-reinforcing: forced selling pushes prices lower, which triggers more liquidations, which pushes prices lower still.

The Iranian adoption paradox

While institutional and Western retail traders are dumping crypto in response to the conflict, Iranian citizens have been increasingly turning to cryptocurrencies amid ongoing hyperinflation and economic instability. Digital assets are functioning as an alternative means of wealth preservation and transfer for people living through the economic consequences of prolonged military conflict.

For Western institutional investors, Bitcoin is a risk asset that gets sold when geopolitical uncertainty rises. For citizens in conflict zones facing currency devaluation and capital controls, it’s a lifeline. Both things can be true at the same time, and they create opposing forces on price.

What investors should be watching now

Oil markets are the leading indicator here. The Strait of Hormuz handles roughly 20% of the world’s oil shipments, and any sustained disruption to that flow would create inflationary pressure that ripples through every asset class.

The $350 million liquidation wave has already flushed out a significant amount of leverage from the system, which reduces the risk of even larger cascading liquidations if the situation deteriorates further.

Bitcoin was trading near $107K when strikes hit Iranian targets in June 2025. It dropped nearly 4% but recovered within weeks. The current price level around $62K reflects a market that has already absorbed significant macro headwinds over the past year. Every ceasefire in this conflict has been shorter than the last one.