Major Coins at Risk? Trump’s Iran Threats Could Trigger a Fresh Altcoin Sell-Off

Mounting tensions in the Middle East and persistent inflation fears are unsettling global markets, prompting a noticeable shift in investor behavior within the cryptocurrency space. As volatility extends to equities, commodities, and digital assets, traders are increasingly moving away from altcoins towards perceived safer havens, namely Bitcoin and stablecoins.

Contents

• Bitcoin ETFs Attract Inflows Despite Declines
• U.S.–Iran Tensions Spark Market Volatility
• Stablecoins, Bitcoin Gain Preference Over Altcoins
• Bitcoin’s Unclear Role Frustrates Market Bulls
• Conclusion

• FAQs

  1. Why is crypto dropping right now?
  2. Which coins are hit the hardest?
  3. Why isn’t Bitcoin acting like gold?
• Glossary Of Key Terms
• Reference

Major cryptocurrencies continued their downward trend on Thursday, reflecting broader macroeconomic and geopolitical anxieties. Cardano (ADA) and Solana (SOL) each experienced losses exceeding 1% in the last 24 hours, with XRP following a similar trajectory.

Bitcoin ETFs Attract Inflows Despite Declines

Dogecoin has shown relative stability today, but it has decreased by more than 10 percent in the past seven days, erasing gains from a recent rally earlier this month. Ether (ETH) also declined by 0.7 percent, negating any weekly progress.

Conversely, U.S.-based spot Bitcoin ETFs witnessed significant inflows during the week despite the price downturn, attracting over $389 million on Wednesday alone, according to available data. Spot ETH ETFs also saw net positive flows of $19 million, indicating a conservative yet stable investor preference for blue-chip crypto assets amidst the prevailing uncertainty.

U.S.–Iran Tensions Spark Market Volatility

Markets are reacting nervously to concerns that the U.S. might directly strike Iran, an action reportedly under consideration amid heightened regional tensions. This increased possibility of conflict escalation is driving investment strategies towards more defensive positions, thereby increasing volatility across both traditional and digital markets.

Simultaneously, the Federal Reserve has issued further warnings regarding persistent inflation. On Wednesday, Chair Jerome Powell suggested that tariffs and geopolitical instability could complicate efforts to curb rising prices. The Fed maintained existing interest rates, but Powell cautioned that rate cuts would only be considered upon receiving compelling evidence of sustained price stability. He also indicated that the cost of tariffs would ultimately be borne by consumers, signaling a hawkish stance that negatively impacted market sentiment on Thursday.

Stablecoins, Bitcoin Gain Preference Over Altcoins

Altcoins, considered riskier investments compared to Bitcoin, have been disproportionately affected by the market downturn. In times of global instability, speculative assets are typically the first to be sold.

Amanda Lee, a digital asset strategist at Frontier Markets, observed that altcoins are suffering due to increasing macroeconomic pressures. "We’re seeing a textbook risk-off move. Capital is rotating toward stablecoins and BTC, and away from smaller-cap coins," she explained.

Bitcoin's market performance has been mixed despite the ETF inflows. The leading cryptocurrency has gained 13% year-to-date, buoyed by ETF optimism and a weaker dollar. However, it has not clearly indicated its future direction amid the current crisis.

Bitcoin’s Unclear Role Frustrates Market Bulls

FxPro analyst Alex Kuptsikevich commented that Bitcoin seems to be caught between two worlds. "It does not respond to rising risk appetite, and does not flood like gold during periods of increased conflict."

While gold has surged in response to heightened geopolitical tensions, Bitcoin has remained rangebound, failing to decisively break higher or act as an effective hedge. This ambiguity is frustrating for market bulls who are hoping for a definitive safe-haven trajectory.

Analysts are advising caution, anticipating further turbulence in the crypto market as both geopolitical and economic uncertainties persist. Market participants will be closely monitoring developments in the Middle East and further statements from the Federal Reserve for clarity.

Conclusion

The cryptocurrency market remains volatile and uncertain, influenced by intensifying geopolitical tensions and persistent inflationary concerns. Bitcoin is experiencing consistent ETF inflows, yet its status as a true safe haven remains unproven. Altcoins are particularly vulnerable, leading investors to adopt defensive positions. All eyes are now on future developments in the Middle East and the Federal Reserve's upcoming decisions.

FAQs

1. Why is crypto dropping right now?
   Rising tensions in the Middle East and inflation fears are pushing investors toward safer assets, negatively impacting crypto prices.
2. Which coins are hit the hardest?
   Solana, Cardano, XRP, and Ether have all experienced declines, with Dogecoin down over 10% this week.
3. Why isn’t Bitcoin acting like gold?
   Despite ETF inflows, Bitcoin remains rangebound and has not seen the same surge as gold during the current crisis.

Glossary Of Key Terms

• Altcoins – Cryptocurrencies other than Bitcoin; generally considered higher-risk investments.
• Bitcoin (BTC) – The first and largest cryptocurrency by market capitalization.
• Stablecoins – Cryptocurrencies pegged to stable assets such as the U.S. dollar.
• Ether (ETH) – The native token of the Ethereum blockchain.
• ETFs – Investment funds that track assets like Bitcoin or ETH.
• Inflation – Rising prices that erode purchasing power.
• Federal Reserve – The U.S. central bank responsible for managing interest rates.
• Tariffs – Taxes on imports/exports that can increase prices.

Reference

• osovalue.com
• www.coindesk.com