Bitcoin ($BTC) has this morning bounced back to over $71,000 after it lost $60 billion in total market capitalization over the weekend following US President Donald Trump’s threat to “obliterate” Iran’s power plants if the country’s military refused to reopen the Strait of Hormuz.
In the 15 minutes following Trump’s threat on Saturday, $BTC dropped from $70,100 to $68,200, a $37 billion wipeout for the world’s largest digital asset. Over $240 million in leveraged crypto trades were liquidated within the hour.
By Sunday evening, total liquidations crossed $1 billion, with long positions accounting for 85% of the damage.
$BTC failed to bounce, remaining near $68,200. Total crypto market cap sustained its losses.
Total crypto market capitalization. Crosshairs highlight 7:44pm Truth Social post. Source: TradingView
Trump says war ending ‘very soon,’ then obliterates crypto markets
Less than 24 hours before threatening to blow up power plants, Trump had said the US was “considering winding down” the war.
Indeed, as Trump told ABC News on Saturday that he was planning peace talks with an end to the war “very soon,” $BTC made a brief push toward $71,000 on the optimistic rhetoric.
Then, at 7:44pm New York time, Trump published his bearish post. Crypto traders who had positioned themselves with leveraged long positions suffered liquidations within minutes.
Read more: Bitcoin up, Dubai real estate down since Iran war began
Coinglass’ Crypto Fear and Greed Index fell to nine out of 100, deep into “Extreme Fear” territory.
Crypto, one of the only large and relatively liquid markets open during the announcement besides foreign exchange, bore the brunt of the initial losses. Stock exchanges, bond markets, and commodity futures were all closed at the time.
Analysts have already estimated that Bitcoin’s hashrate has dropped roughly 100 EH/s since late February, mostly due to operational disruptions in Iran.
Luxor Technology’s Hashrate Index estimated that Gulf states, including Iran, represent 8-10% of global hashrate. Striking Iran’s power plants would physically knock the country’s remaining $BTC miners offline, not to mention accelerating risk-off capital flight away from crypto investments.
As of Sunday evening, $BTC was trading at a 23% year-to-date loss. Altcoins like Ethereum and XRP have lost 31% and 26% over the same time period, respectively.
Trump’s-48 hour deadline for a Strait of Hormuz deal expires today, Monday evening at 7:44pm New York time.
