US forces struck an Islamic Republic military base in Kamalshahr on Thursday morning, continuing a pattern of military operations that has kept global markets, including crypto, on edge for months.

The strikes targeted a facility in Alborz Province, with explosions and visible smoke reported in the Hesarak area. The operation was conducted by US Central Command as part of what the military has framed as self-defense against perceived threats from Iranian forces.

A conflict that keeps escalating

The current round of hostilities traces back to February 28, 2026, when coordinated US and Israeli strikes launched a campaign aimed at degrading Iran’s military capabilities. The target list has included missile infrastructure and drone programs.

A ceasefire was established around April 8. That ceasefire has been violated multiple times since May. In late May, US strikes near Bandar Abbas drew Iranian military responses, and Iranian officials have claimed retaliatory strikes on US-linked bases caused damage in the hundreds of millions of dollars.

What this means for crypto markets

Following the late May strikes near Bandar Abbas, crypto markets saw nearly $1 billion in liquidations within a single 24-hour period. Bitcoin and Ethereum both took substantial hits as leveraged traders got caught on the wrong side of sudden volatility spikes.

Rather than absorbing capital fleeing traditional risk assets, crypto has mostly traded like a high-beta risk asset itself, selling off alongside equities when headlines turn ugly. The structure of crypto markets, with their 24/7 trading, cross-exchange margin calls, and thin weekend liquidity, makes them uniquely vulnerable to the kind of sudden sentiment shifts that military conflict produces.

What investors should watch

The nearly $1 billion liquidation event in late May could be a preview, not an outlier. Traders who are running significant leverage in this environment are essentially betting that the next headline won’t be worse than the last one.

The Iran conflict also raises a subtler risk that most crypto investors aren’t pricing in: sanctions expansion. Every escalation increases the likelihood that the US tightens financial restrictions on entities connected to Iran’s military apparatus. If those restrictions expand to cover more crypto-adjacent infrastructure, such as exchanges or payment processors with exposure to sanctioned regions, the compliance burden on the entire industry could increase materially.