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Bitcoin Slides as US-Iran Tensions Escalate

Bitcoin slid on Tuesday after investors went into “risk-off” mode following escalating attacks between the U.S. and Iran.

The largest cryptocurrency had initially shrugged off President Donald Trump’s threats to the Middle Eastern nation, as well as the first strikes.

But things heated up on Tuesday, and bitcoin’s price slid. It was recently down more than 2% on the day, trading for $77,363. The coin had pushed past as high as nearly $81,282 on Friday.

The Tuesday attacks from the U.S. were because Iran tried to put mines in the Strait of Hormuz, and also because of an attack on an American military base in Jordan, according to President Trump.

U.S. Central Command said on X that Iran had also attacked commercial ships.

Today at 12 p.m. ET, U.S. forces began striking Islamic Revolutionary Guard Corps (IRGC) targets in Iran. The strikes follow recent attempted attacks by the IRGC against commercial shipping in the Strait of Hormuz and against American service members deployed to the region.
— U.S. Central Command (@CENTCOM) September 1, 2026

“The strikes follow recent attempted attacks by the Islamic Revolutionary Guard Corps against commercial shipping in the Strait of Hormuz and against American service members deployed to the region,” the post read.

Iran responded with a “decisive operation” against U.S. military bases, according to Iranian media. Oil surged on the news.

Bitcoin’s price has been sensitive to geopolitical tensions this year — especially after Iran and Israel attacked Iran. The cryptocurrency has typically faced downward pressure on news of war, only to then rally when Trump raised hopes of a ceasefire.

Despite Bitcoin’s price being relatively muted, in recent months, it has made more wild swings since mid-August.

Bitcoin’s immediate reaction to rising oil prices is to drop: more expensive energy means higher inflation, and higher inflation typically means the U.S. central bank will postpone rate cuts, which can restrict the liquidity that bitcoin needs to gain momentum.

The Federal Reserve’s chair, Kevin Warsh, last week gave his first major speech as leader of the central bank and said that inflation in the world’s largest economy had not come down enough.

Traders are now no longer pricing in an interest rate cut this year, instead expecting a hike. Bitcoin has typically performed well in the past in low interest rate environments.

Still, the coin had one of its best runs in August after the U.S. Treasury said it would at least double the size of its liquidity-support buyback operations, in response to surging borrowing costs.

The announcement hurt the dollar but non-yielding assets like bitcoin and gold have benefited.

This post Bitcoin Slides as US-Iran Tensions Escalate first appeared on Bitcoin Magazine and is written by Mathew Di Salvo.

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