ecause of the latest severe tensions in the Middle East, a major plunge in the crypto market occcured on October 1st. Inevitably, this led to a decrease in cryptocurrency prices and liquidations.
Market Impact
Over a 24-hour period, $489 million were liquidated. Bitcoin fell 3%, dropping to $61,598 while investors in Ethereum and Solana lost 4.31% and 5.51% respectively, showcasing heavy losses.
Investor Sentiment
Crypto investors’ sentiment - which is measured by the Fear and Greed Index - moved from 61 to 50 points, indicating severe uncertainty. To protect their assets during this geopolitical conflict, investors claimed to have traded Bitcoin for gold.
Broader Financial Market Reactions
The disruptions went beyond cryptocurrencies, weakening the US equity markets just as much. With the US dollar Index and gold prices surging, investors have turned to safer and more traditional assets.
Crypto's Role in Geopolitical Crises
Although Bitcoin is volatile lately, analysis show that it has consistently surpassed regular financial investments during historical geopolitical crisis. This means that cryptocurrencies could very well be a hedge in the midst of uncertain times, regardless of the current challenges and pressures.
