Donald Trump has issued a stark warning threatening that power plants of Iran will be obliterated if it does not open the Strait of Hormuz before the 48-hour deadline.
Iran on the other hand has warned that if its power plants are attacked it will destroy all US-linked energy infrastructure in the Middle East.
The implications of this threat have already started showing. In the early trading hours of today Bitcoin fell below the $68,000 mark due to geopolitical tensions.
Interestingly, this threat comes just a day after US president had suggested that the ongoing conflict with Iran might be winded down. The conflict continues to add uncertainty to the global markets.
Hence such severe and swift reactions in crypto spaces.
The Kobeissi Letter highlighted the fragile sentiment among traders during this period of geopolitical instability as in just a single hour more than $240 million worth of leveraged cryptocurrency positions were liquidated.
It has been pointed out by market analysts that Iran is playing a significant role in the global Bitcoin mining system. This is mainly due to it relatively cheap energy.
If its power grid is potentially disrupted, in the event of US military strikes, it will force a substantial portion of mining operations offline.
Due to these geopolitical tensions concerns are being raised about reduced network activity and volatility in crypto markets.
However, sentiments across social media remain divided. Many users believe that Bitcoin will act as a speculative asset. It will drop sharply as fears escalate.
Many other users argue that this is a short-term panic and will not be a long-term problem.
Traders currently are urging caution, advising investors to not make decisions impulsively, and to ignore the rapidly involving headlines.
Both Tehran and Washington are currently giving conflicting signals. Analysts believe that it will take time for markets to stabilise and return to clarity.
Also read: US-Iran war: Trump seeks $200 billion in military funds
