The cryptocurrency market started October on a bad note because of growing problems between Israel and Iran. People expected that the market would go up this month, but now, there are doubts about this. The reason is that Iran and Israel are in conflict, which is worrying investors and affecting the stock and crypto markets.
What Happened Between Israel and Iran?
Recently, Iran attacked Israel with missiles. This happened after Israel launched attacks on Hezbollah in Lebanon. The situation has made investors nervous. The US government said that Iran fired nearly 200 missiles at Israel. As a result of this news, Bitcoin’s price dropped to $60,164, and the price of Gold went up by 1%.
Impact on Stock Markets
The conflict made stock prices in the US fall. Some of the most important stock market indices, like the Nasdaq, Dow Jones, S&P 500, and Russell 2000, all ended the day lower on Tuesday. People are afraid that the fight between these countries might grow bigger, and this could impact other countries too. Because of this, the stock market went down.
Here’s how some stock indices were affected:
- Russell 2000 dropped by 1.48%
- Nasdaq Composite fell by 1.53%
- Dow Jones went down by 0.41%
- S&P 500 lost 0.93%
How It Affected Gold, Silver, and Oil Prices
Not only did the stock market go down, but the prices of safe-haven assets like Gold and Silver went up. When people get worried, they often buy Gold because they feel it is safer. So, the prices of Gold and Silver rose by around 1%.
- Gold increased by 1.07%
- Silver increased by 0.82%
People also think that the price of oil might go up if the situation gets worse. Right now, the price of West Texas Intermediate (WTI) crude oil is more than $70 per barrel, and Brent crude is close to $75 per barrel.
Global Concerns and Fear of a Bigger Conflict
People all over the world are worried that this might turn into a bigger conflict, possibly even World War III. Many are discussing this on social media, and news channels everywhere are giving regular updates. The tension has caused a lot of uncertainty in global markets.
Why Markets React This Way to Conflict
Whenever there is a conflict between countries, it usually makes the markets react negatively. People don’t like uncertainty. It makes them sell their investments because they don’t know what will happen next. This is not the first time Israel and Iran have had problems. Earlier this year, Iran also attacked Israel with drones and missiles. This happened after Israel’s airstrike killed a top Iranian general in Syria.
US Response to the Situation
The US President Joe Biden and Vice President Kamala Harris have been informed about the situation. They are keeping a close eye on what’s happening. The US Military in the Middle East has been ordered to help Israel defend itself if needed.
Impact on Cryptocurrency Market
The cryptocurrency market was also affected by the news. Just like the stock market, crypto prices dropped too. People were hoping for a good start in October, but the conflict made things worse.
According to data from CoinGlass, there have been big outflows (more sellers than buyers) in cryptocurrencies like Bitcoin, Ethereum, and Solana. This means many people are selling their crypto because they are scared the prices will drop more.
Bitcoin and Ethereum Prices Drop
Bitcoin’s price fell to $60,164. The drop caused a large number of sell-offs. Over 160,712 traders lost money in the last 24 hours due to market volatility, making it one of the biggest sell-off events since September. Bitcoin has been trying to stay above $60,000, but if it goes below this level, it could fall to $58,000 or even $55,000.
The second-largest cryptocurrency, Ethereum, is also not doing well. Its price is now close to $2,500.
Total Market Value Drops
The overall value of the cryptocurrency market has decreased to $2.25 trillion, which is 6.2% lower in just 24 hours. This shows that many people are selling because they don’t want to risk losing more money.
Bitcoin ETFs Also Affected
Bitcoin Exchange-Traded Funds (ETFs) were also affected. ETFs are a way to invest in Bitcoin without actually buying it. On October 1, US spot Bitcoin ETFs saw a large amount of money being pulled out, around $243 million. This was the biggest outflow in almost a month.
Here’s how some ETFs were affected:
- Fidelity Wise Origin Bitcoin Fund: lost $144.7 million
- ARK 21Shares: lost $84.3 million
- Bitwise Bitcoin ETF: lost $32.7 million
- VanEck Bitcoin ETF: lost $15.8 million
- Grayscale Bitcoin Trust: lost $5.9 million
The only ETF that gained money was the BlackRock iShares Bitcoin Trust, which got $40.8 million in new investments.
What’s Next for the Market?
Experts say that the first week of October is often bad for the market, but things might get better in the long term. People need to watch the news closely and be ready for more ups and downs.
The ongoing tensions between Iran and Israel, along with other global issues, could cause more price changes in the coming weeks. Investors should stay cautious and be prepared for more market volatility.
Final Thoughts
The conflict between Israel and Iran is making the market unstable. Both the stock and crypto markets are down because of this. Many people are selling their investments due to fear and uncertainty. While the situation might calm down, it’s best to stay informed and watch for any new developments. This could just be a temporary setback, and the market might stabilize in the coming weeks.