The clouds of war between the US and Iran are thickening. Why is the crypto market "voting with its feet"?

Latest news on February 19 indicates that a military action by the US against Iran is "imminent." US forces have deployed dual aircraft carrier strike groups in the Middle East, and Israel is preparing for negotiations to break down. This geopolitical "black swan" directly hit the sensitive nerves of the crypto market—just after Trump threatened that "if negotiations fail, he will support Israel's airstrikes on Iran," Bitcoin plummeted overnight, with nearly 120,000 investors liquidated.

On the surface, escalating conflict should benefit "digital gold" Bitcoin, but the market reaction was exactly the opposite. When reports of "substantial progress" in US-Iran negotiations emerged on February 17, crude oil and gold prices plunged sharply, and Bitcoin also fell below $67,000, with nearly 77,000 traders liquidated. This indicates that in the current macro environment, cryptocurrencies are more often viewed as high-risk assets. During geopolitical turmoil, funds tend to withdraw from highly volatile assets and shift toward tangible "hard currencies" like gold and copper.

On a deeper level, by 2026, market pricing logic has shifted from "buy growth" to "buy safety." The deterioration of US dollar liquidity quality, high long-term financing costs, and the close tie of cryptocurrencies to US dollar leverage naturally put pressure on the market. If a real US-Iran war breaks out, short-term panic selling may intensify, but if the conflict expands, Bitcoin's role as a non-sovereign safe-haven asset could be reactivated—depending on whether the war is a "lightning war" or a "prolonged conflict."