On June 13, 2025, Israel launched a large-scale military operation called “Operation Rising Lion.” The targets were facilities in Iran, including suspected nuclear sites, strategic infrastructure, and nuclear leaders. Over 200 fighter jets attacked around 100 targets, marking the most massive direct confrontation between Israel and Iran to date. The escalation came despite prior international warnings and diplomatic efforts to defuse tensions. Iran responded immediately with a military counteroffensive, including over 100 drone attacks and ballistic missiles, some of which were intercepted but also resulted in deaths and injuries.
The extent of the destruction and the direct involvement of foreign powers – British and US fighter jets were put on alert – suggest that this was a coordinated operation that may not be limited to a one-off strike. The Israeli prime minister announced that the attacks would continue until the threat to national security had been eliminated in his view. Iran sent a clear signal of revenge by raising the red flag. The situation remains extremely tense.
Impact on Oil Prices and Inflation
The military escalation led to massive reactions on the commodity markets within the first few hours. Oil prices rose significantly, in some cases by more than 7% within a day. According to market analyses, the price of a barrel of oil could rise to as much as US$120 if the uncertainty persists. Such a development would have direct consequences for global inflation. Even before the attack, warnings were issued that a conflict with Iran could push consumer price inflation in the US up to 5%.
Not only the energy markets are reacting particularly sensitively, but also monetary policy strategy. Rising inflation would call into question expectations of interest rate cuts, which were recently reinforced by falling producer prices. In this scenario, the Federal Reserve might have to abandon planned interest rate cuts or even consider new interest rate hikes – which in turn would have a direct impact on investment, consumption, and asset prices.
Reaction of the Financial Markets
The stock markets reacted immediately and sharply. Futures on major US indices such as the Dow Jones recorded losses of up to 770 points. The VIX volatility index jumped into double digits, a clear sign of greatly increased market uncertainty. While traditional risk assets declined, so-called safe-haven assets such as gold and US government bonds saw inflows.
Dow Jones (Image: Tradingview)
The US dollar index fell to its lowest level since 2022, partly due to geopolitical uncertainty, but also partly due to monetary policy speculation. Uncertainty about future interest rate moves and fears of further global tensions were reflected in almost all asset classes.
Bitcoin and the Crypto Markets: Between Correction and Resilience
The Bitcoin price reacted to the news with a significant correction. Within just three days, the cryptocurrency lost over 7% of its value. On the night of June 14, the price fell to around US$102,800 – a point at which strong liquidity was called upon in the short term. This decline also closed a so-called CME gap, i.e., a price gap in futures trading, which is often considered a technical target range by professional traders.
Bitcoin Price Chart (Image: Tradingview)
Despite the price losses, there was no panic reaction as seen in previous geopolitical crises. Although open interest in the Bitcoin futures market fell by around US$3 billion (or 8%), the funding rate remained positive. This signals that market participants remain predominantly bullish despite short-term uncertainty, or at least that there has been no significant departure from the market.
It is important to compare this with a similar attack in April last year: back then, a large-scale attack on Iranian territory also triggered short-term market turmoil. At that time, nearly $1 billion in Bitcoin positions were liquidated. However, after a period of increased volatility, the market quickly calmed down. This pattern could repeat itself – provided the conflict does not escalate or severely disrupt global supply chains.
The structural strength of the market is also noteworthy: liquidity zones are currently below the recent low and above the recent highs – at over $110,000. This shows that investors expect increased trading volume during both setbacks and breakouts.
In addition to geopolitical risks, there were also positive developments in the crypto sector. Progress was reported in the US on the regulation of stablecoins. Coinbase also announced several partnerships, including one with American Express. A credit card with up to 4% Bitcoin cashback is planned. Such developments could promote confidence in and the use of Bitcoin and cryptocurrencies in everyday life in the long term, regardless of short-term market turmoil.
Assessment and Outlook
In the short term, geopolitical escalations repeatedly have a strong but mostly temporary impact on the financial markets. In the medium to long term, the decisive factor will be whether the conflict can be quickly contained or whether a new phase of prolonged uncertainty begins. The big unknown is the oil price: if it does indeed reach the USD 120 mark, a delayed but sustained impact on inflation, interest rates and the global economy would be expected.
For Bitcoin, the situation is more nuanced: on the one hand, the cryptocurrency is under short-term pressure due to its market mechanisms – liquidations, profit-taking, technical corrections. On the other hand, it benefits in the medium term from growing uncertainty about traditional financial systems and technological advances within the ecosystem.
The important thing remains: investors should avoid emotional decisions in times of high uncertainty. A clear strategy, risk management, and a long-term time horizon are more crucial than ever in times of geopolitical tension.
Author
Ed Prinz is Chairman of https://dltaustria.com, Austria’s most renowned non-profit organization specializing in blockchain technology. DLT Austria is actively involved in educating and promoting the value and application possibilities of distributed ledger technology. It does this through educational events, meetups, workshops, and open discussion forums, all in voluntary collaboration with leading industry players.
Disclaimer
This is my personal opinion and not financial advice.
For this reason, I cannot guarantee the accuracy of the information in this article. If you are unsure, you should consult a qualified advisor whom you trust. This article does not make any guarantees or promises regarding profits. All statements in this and other articles are my personal opinion.