What impact does the U.S.-Iran conflict have on the cryptocurrency market?

On Saturday, the U.S.-Iran war broke out, and many traders began to worry, fearing that the U.S.-Iran war would shrink their assets and reduce the numbers in their wallets.

First, it is important to understand that wars do not have a long-term trend impact on the crypto market.

The impact of the U.S.-Iran conflict on the cryptocurrency market is almost only a short-term emotional shock; in most cases, the impact will quickly fade and cannot change the original operating trend of the cryptocurrency market.

The core points are as follows:

1. The game of asset attributes: the core contradiction

On one hand, Bitcoin is regarded as digital gold by most investors and institutions, and the U.S.-Iran conflict will reinforce its decentralized, borderless, and sovereign-freezing-resistant attributes, attracting safe-haven funds to enter the market.

On the other hand, Bitcoin has already been included in asset portfolios by global institutions, and many G companies treat it as a strategic reserve. However, in an environment of extreme panic, institutions will also sell cryptocurrencies to recoup liquidity, causing it to follow risk assets in a plunge.

2. Energy and computing power supply shock

Iran is one of the core hubs for Bitcoin mining globally, and the conflict will directly lead to large-scale shutdowns of Iranian mining farms, causing a short-term contraction in global Bitcoin computing power and rising mining costs, reinforcing its scarcity narrative from the supply relationship; at the same time, the war will drive up global energy prices, further raising mining barriers and reducing new supply, indirectly benefiting Bitcoin's price.

3. Amplified leverage volatility

The leverage trading in the cryptocurrency market is extremely high, and sudden events that cause prices to surge or plummet can instantly trigger large-scale forced liquidations, forming a vicious cycle of "price increase → short liquidation → price surge" or "price decrease → long liquidation → accelerated selling," greatly amplifying short-term volatility, and even leading to short-term market value evaporation and liquidations.

From the above points, it can be seen that the biggest impact of the U.S.-Iran war on the crypto market is through leveraged trading, with little effect on spot trading. This can also be seen from the market trend on Saturday; during the day, all Bitcoin types had a decline of several points, but by night, they had rebounded, ultimately closing as a candlestick with a lower shadow.

This also validates the saying: "When you wake up, the price is still the same, but the position is gone."

My view is that the U.S.-Iran war has a significant impact on short-term traders, while it has almost no impact on long-term traders.