Bitcoin Plunges Below $64,000 as U.S. Strikes Iran

Bitcoin and other cryptocurrencies plummeted on Oct. 28 after the United States and Israel launched military strikes against Iran. Approximately $128 billion (about 185 trillion won) in market capitalization evaporated from the cryptocurrency market immediately following news of the airstrikes. Bitcoin, which had been trending lower since breaking below the psychological support level of $67,000 earlier this month, fell to the $64,000 level amid the shock.

According to global market tracking site CoinMarketCap, bitcoin was trading at $64,081.42 as of 8:09 p.m., down 4.02% from 24 hours earlier. The cryptocurrency briefly dropped to the $63,000 level immediately after the strikes. Major altcoins also declined, with Ethereum, the second-largest cryptocurrency by market cap, falling 5.69% to $1,870.74. Ripple and Solana dropped 7.35% and 6.53%, respectively.

According to major international news outlets, Israel's defense minister declared a state of emergency nationwide immediately after strikes on military targets in Tehran, Iran. The United States subsequently confirmed its participation in the military operation against Iran, bringing geopolitical tensions in the Middle East to the surface. This marks the first direct military clash between Israel and Iran in eight months since the "12-Day War" last June, which inflicted severe damage on Iran's nuclear facilities and military leadership.

While the U.S. had been conducting nuclear negotiations with Iran, it also deployed large numbers of fighter jets and other military assets to the Middle East, increasing military pressure. Given the concentration of substantial forces in the region, concerns are growing that the conflict could escalate into a broader regional war. U.S. President Donald Trump posted a video on social media telling the Iranian people, "The time has come to seize your freedom," adding, "Once we finish our mission, take over your government."

The timing of the strikes over the weekend amplified volatility in the cryptocurrency market. While bitcoin trades 24 hours a day, seven days a week, stock and bond markets are closed on weekends. This makes cryptocurrencies virtually the only liquid asset traders can sell when geopolitical risks spike while traditional markets are closed.

"Every time a significant event happens on the weekend, bitcoin always acts as a pressure relief valve," Justin Daneathan, head of research at Actic Digital, told Bloomberg. Indeed, bitcoin dropped more than 6% at one point to the $62,000 level amid heavy selling pressure immediately after news of the strikes broke. This was the lowest level in three weeks since the cryptocurrency nearly broke below $60,000 earlier this month. However, Daneathan noted that "losses were partially recovered within hours after the attack," explaining that "the impact is limited because much of the leverage has already been unwound and selling pressure has been exhausted."

Nevertheless, if geopolitical risks spill over into traditional capital markets next week and risk-off sentiment intensifies, further declines in bitcoin appear inevitable. The strikes, following a month of U.S. military buildup and failed negotiations over Iran's nuclear program, raise the risk of escalation into a broader regional conflict in one of the world's most economically sensitive areas.

The Fear and Greed Index, which measures current cryptocurrency market sentiment, stands at 11, indicating "extreme fear." A reading closer to 0 suggests the market is in a state of fear with high probability of overselling, while a reading closer to 100 indicates the market is driven by greed with high probability of a correction.