Geopolitical tensions surged early Friday following Israeli airstrikes on Tehran, prompting a sharp reaction across global financial markets. Bitcoin (BTC) dropped by 5% to $102,900, while gold surged past $3,420 per ounce as investors rushed into traditional safe-haven assets.

The price movement underscores how sensitive markets remain to geopolitical flashpoints. The crypto market, in particular, saw a sharp pullback, with Bitcoin leading the decline. Ethereum fell below $2,500, and XRP slid to $2.10. In the past 12 hours alone, over $1 billion in leveraged crypto positions were liquidated, with long positions accounting for $937 million of that total, according to data from Coinglass.

Operation Rising Lion Sparks Market Reaction

The military offensive, dubbed Operation Rising Lion, was confirmed by Israeli Prime Minister Benjamin Netanyahu, who stated that the operation would continue “for as many days as it takes to remove this threat.” The Israeli government said the strikes were in direct response to ongoing threats from Iran, especially surrounding its nuclear program.

U.S. Secretary of State Marco Rubio confirmed that Israel had informed the U.S. prior to start the attack and framed the move as a defensive measure. The developments came just hours after the International Atomic Energy Agency (IAEA) censured Iran for failing to cooperate with inspectors. In response, Tehran reveal the development of a third nuclear enrichment site and plans to deploy more advanced centrifuges.

Investors Flee Risk Assets

The immediate market impact was a sharp decline in risk-sensitive assets. Bitcoin, often regarded as a hedge against fiat currency and centralized systems, failed to hold ground in the short term. Instead, investors turned to traditional stores of value—chiefly gold and U.S. treasuries.

Spot gold soared to $3,429, its highest level in months, as fear-driven buying intensified. Gold’s role as a safe haven in times of geopolitical uncertainty remains strong, and Friday’s surge was a clear example of that investor behavior. Meanwhile, bond prices rose and yields fell, another sign of heightened risk aversion.

The U.S. dollar rose against several major currencies but weakened against classic safe havens like the Japanese yen and Swiss franc.

Crypto Market Faces Heavy Liquidations

The crypto market took a significant hit, not just from falling prices but from a wave of leveraged liquidations. In times of high volatility, highly leveraged positions are often forced to close, leading to cascading sell-offs.

According to Coinglass, nearly $1 billion in crypto positions were liquidated over the past 12 hours. Bitcoin traders bore the brunt of the losses, but Ethereum and other altcoins also saw significant liquidations. The imbalance—$937 million in long positions versus just $67 million in shorts—highlights the overly bullish sentiment that was abruptly overturned by geopolitical headlines.

Strategic Implications Beyond Markets

Beyond the immediate price impacts, the escalation raises broader questions about the resilience of decentralized assets during times of international conflict. While Bitcoin is often lauded for its resistance to central authority and censorship, market sentiment still reacts to global tensions much like traditional assets.

Bitcoin’s drop to $102,900 represents a significant pullback from earlier this week, when the digital asset had rebounded to $108,450. Despite signs of a potential recovery, the fresh wave of uncertainty has rattled investor confidence. BTC is now hovering just above its 50-day simple moving average—a key technical level that could either provide support or open the door to further downside if breached.

Meanwhile, the U.S. State Department has started withdrawing some diplomatic personnel from Iraq and issued advisories urging American citizens to leave the region. Voluntary evacuations have also been authorized for U.S. military families stationed in Middle Eastern countries.

Will Bitcoin Rebound?

Historically, Bitcoin has shown a pattern of quick declines during periods of geopolitical unrest, followed by strong recoveries. As digital assets gain more recognition as long-term stores of value, many investors expect BTC to rebound once market volatility subsides.

However, in the immediate term, sentiment remains fragile. With regional tensions rising and energy prices climbing, markets are likely to remain on edge. Traders will be closely monitoring developments in the Middle East, along with signals from central banks and geopolitical leaders.

Final Thoughts

Friday’s events have once again highlighted the interconnectedness of global geopolitics and financial markets. Bitcoin’s decline and gold’s rise are classic indicators of a shift to safety amid uncertainty. While crypto assets may continue to face volatility in the short term, their long-term position in the global financial landscape remains strong—especially as narratives around digital sovereignty and decentralized finance continue to gain traction.