DIGIVESTASI - Cryptocurrencies have fallen victim to the tensions between Israel and Iran. The market capitalization of crypto assets shrank by about IDR 2,000 trillion overnight. Based on data from Coinmarketcap.com. As of today, Sunday (14/4/2024), the market capitalization of crypto assets reached $2.32 trillion or around IDR 36,748.8 (1 USD = IDR 15,840).

This amount is down about 4.76% or $131.39 trillion (Rs 2,812.2 trillion) compared to the previous day. This decline worsened the plight of cryptocurrencies.  On Friday (December 4, 2024), the market capitalization of the cryptocurrency market decreased by about $172 million (Rs 2,724.4 trillion). 

At least 261,054 traders were affected and $860.82 million (Rs 13,635.39 billion) worth of crypto assets were liquidated in the last 24 hours, representing nearly 5% of the crypto market capitalization, according to crypto.news.  
Large crypto assets, ranging from Bitcoin to Ethereum, have also come under fire. Cryptocurrencies as a whole have plummeted due to rising geopolitical tensions in the Middle East. Since cryptocurrencies are risky assets, they will be abandoned in the event of geopolitical tensions such as those in the Middle East. 

When geopolitical tensions arise, investors choose to put their money into safe-haven assets such as gold and the US dollar. 

On Saturday night (April 13, 2024), the geopolitical situation in the Middle East worsened after Iran launched drone and missile attacks on Israel. As is known, the drone attack on Saturday was the first direct attack on the Tel Aviv area. This risks escalation in the region, as the US has pledged "strong" support for Israel.

Mass sales of virtual currencies are expected to continue. Rising geopolitical tensions will likely lead to further crypto selling. In addition to political tensions, cryptocurrencies have also come under pressure from rising inflation in the United States. US inflation increased from 3.2% (YoY) in February 2024 to 3.5% (YoY) in March 2024.  

This rise in inflation has led to growing pessimism in the market regarding whether the US central bank, the Federal Reserve, will cut interest rates in the near future. According to the CME FedWatch tool, only 27.3% of market participants currently expect the Fed to cut rates in June. This figure is much lower than two weeks ago when it reached 60-70%. 

"The massive crypto decline is likely to continue as (geopolitical tensions) escalate. People are now looking forward to what will happen on Monday," crypto fund Split Capital said.

Find more news and articles on Google News