In his latest statement about the developing crisis with Iran, US President Donald Trump drew attention to a new military phase that he described as a “big wave”. This warning made by Trump triggered an unexpected price movement in global markets. While there was a serious loss in value, especially in precious metals, there was a rapid rise in cryptocurrencies.
There was a sharp decline in gold and silver
Trump described the US military operations in the region as “very strong” and pointed out that the scope of the operations could expand further in the future. There were huge sales in gold and silver within just an hour after the statements. The spot gold price fell by 2.05 percent, falling by approximately $100 per ounce. With this harsh move, the market value of gold decreased by approximately 750 billion dollars. The loss in silver was sharper; Prices lost 7 percent of their value in less than two hours, and there was a total contraction of $370 billion. This situation led investors to question the safe haven role of precious metals.
Fast Capital Inflow to Cryptocurrencies
Unlike precious metals, a large amount of capital flowed into digital assets during the same period. Bitcoin’s price rose 5 percent in 50 minutes, exceeding the $68,000 level and adding approximately $60 billion to the market value. Ethereum, on the other hand, regained the level of 2 thousand dollars with a 5.8 percent increase and recorded an additional growth of 23 billion dollars. During large volume transactions, some market analysts pointed out that there were significant liquidations in short positions and stated that the market value increased by $ 100 billion in minutes, and approximately $ 80 million of short positions were liquidated.
It was stated that the crypto market grew by 100 billion dollars in the last 45 minutes, while short positions worth approximately 80 million dollars were liquidated.
Investors generally preferred gold during periods of geopolitical risk. However, this time, while there were sharp sales in the metal markets, cryptocurrencies came to the fore. The rapid rise of Bitcoin and Ethereum attracted attention.
This reversal movement especially showed that funds were changing positions and market dynamics may be changing the safe haven perception. Analysts stated that the rapid unwinding of positions in gold and silver futures increased volatility. A total loss of more than 1 trillion dollars in just one hour also revealed how fragile the markets were with the sudden change in expectations.
Bitcoin’s Coverage of Geopolitical Risk and Balances in Futures Markets
At the time of the first shock, a total of approximately $300 million was liquidated in the cryptocurrency market. However, futures data revealed that despite price volatility, the market structure was relatively resilient. Financing rates were seen to fall below 6 percent, resulting in a decrease of only $1 billion in open position size. This situation was interpreted as highly leveraged positions being largely cleared before geopolitical tension.
A market analyst stated that after the first headlines, there was a liquidation of approximately $300 million and financing rates remained quite low.
It was observed that the Bitcoin market showed a much more erratic reaction during the similar tension in the Middle East last year, and this time the prices recovered after a short-term decline. Market participants think that the limited chain liquidations this time suggest that the current environment is more prepared for geopolitical risk.
The rapid correction in gold and silver indicated that investor portfolios were being reshaped and there may be a change in safe haven dynamics. If the new military phase indicated by Trump comes to the fore, volatility is expected to continue. It is considered that the next news flow may be decisive in whether crypto assets will continue their durability or whether traditional safe havens will come to the fore again.
