After Iran fired a wave of drones at Israel on Saturday night, the prices of cryptocurrencies dropped. This was the first sign of the chaos that could hit the markets as investors start to price in the possibility of a wider Middle East war.
CoinMarketCap says that the prices of Bitcoin, Ether, and XRP all dropped from Friday. Bitcoin’s price dropped 5%, Ether dropped more than 7%, and XRP dropped 13.5%.
Wall Street’s response to Iran’s first-ever, full-scale military attack on Israel will become more clear on Sunday night when U.S. futures trading for stocks, bonds, commodities, and currencies opens.
Friday’s trading provided a sneak peek at what’s to come. A two-day attack on Israel was predicted by reports at the time, which caused the benchmark oil price in the United States to rise by up to 3% and surpass $87 per barrel.
As investors sought safety, U.S. Treasury bonds saw a strong rally as well, bringing the 10-year yield down by as much as 10 basis points.
In a similar vein, the US dollar strengthened as investors shied away from riskier emerging-market currencies due to geopolitical uncertainties.
A five-month low for the euro was reached against the US dollar as investors considered the possibility that the European Central Bank will lower interest rates before the US Federal Reserve.
Gold, which is also typically regarded as a safe-haven asset, saw a sharp increase in price to a record high above $2,400 an ounce, although it eventually reversed those gains late on Friday.
Since October, when militants supported by Iran assaulted Israel, tensions in the Middle East have been on the rise. There have also been rocket launches on Israel by other Iranian-backed groups in Yemen, Syria, Iraq, and Lebanon.
More recently, Tehran held Israel accountable for the deaths of two Iranian generals in an airstrike in Syria on April 1; Israel has not responded to the accusation.
Iran’s attacks on Israel increase the likelihood that the United States, Israel’s most significant military ally, may be dragged into direct engagements with Iran. After escalating Navy ship movements toward the area in anticipation of an attack, the White House pledged on Saturday to back Israel’s defense.
