The United States and Israel launched military strikes on Iran on February 28, 2026, prompting President Donald Trump to announce major combat operations aimed at preventing nuclear weapon acquisition. Bitcoin fell approximately 7% to around $63,000, while the broader crypto market lost over $70 billion in value amid heavy liquidations. Tokenized gold assets surged as investors sought safe havens amid escalating Middle East tensions.
On February 28, 2026, U.S. President Donald Trump announced that the United States and Israel had initiated 'major combat operations' against Iran, citing missile threats and nuclear concerns. Trump stated, 'We’re going to annihilate their navy, we’re going to ensure that the region’s terrorist proxies can no longer destabilise the region or the world,' and added, 'This regime will soon learn that no one should challenge the strength and might of the United States armed forces.' Israeli Defense Minister Israel Katz declared a nationwide state of emergency following a preemptive strike, warning of potential Iranian retaliation via drones and ballistic missiles.
Iranian state media reported at least 70 killed in Hormozgan province, including a strike on an elementary school, per Al Jazeera. Iran retaliated by firing ballistic missiles at Israel and U.S. bases. Saudi Arabia expressed readiness to support the U.S. in any capacity and solidarity with regional allies. International reactions included NATO closely following developments, China urging an immediate ceasefire, and Turkey offering to mediate. Trump told the Washington Post that 'all I want is freedom for the people.'
The strikes triggered a sharp crypto market sell-off, with Bitcoin dropping from around $65,000 to as low as $63,000, a decline of about 7%, erasing recent gains. Ethereum fell nearly 5% to $1,867. Over $209 million in long positions were liquidated within an hour, contributing to $522 million in total liquidations across 154,000 traders in 24 hours. The total crypto market cap lost roughly $75 billion. Bitcoin's 24/7 trading made it a pressure valve for risk-off sentiment during the weekend, when traditional markets were closed.
Concerns arose over potential disruptions to the Strait of Hormuz, through which 20% of global oil flows, but experts like Daniel Lacalle and Anas Alhajji argued a full closure is unlikely and impractical, as shipping lanes are mostly in Omani waters and OPEC could offset supplies. Tokenized gold assets, such as Tether Gold (XAUT) reaching $5,455 and Paxos Gold (PAXG) at $5,438, surged up to 4-5%, highlighting investor preference for safe havens. Bitcoin funding rates plummeted to -0.0165, near three-year lows, indicating aggressive short positioning. Historical patterns show initial dips followed by recoveries after past Iran-related tensions, though current market fragility, with U.S. spot Bitcoin ETFs turning net sellers, suggests caution.
